From Dietz and Watson to Superfit Inc. to JDV Electric, PIDC is a long-time supporter of Philadelphia’s family-owned businesses. That’s why we saw the importance in partnering with an organization with the same goal, the Initiative for Family Business and Entrepreneurship (IFBE) at Saint Joseph’s University. On April 14th we will bring you an educational workshop on How to thrive in a Family-Owned Business.
IFBE is the region’s only university-based support for family business. It provides family businesses the support, guidance and tools necessary to increase long-term competitiveness, ownership prosperity and family unity for generations to come.
The IFBE office is run by Director, Meghan Juday and Assistant Director Mary C. Nicoletti. We were able to catch up with the busy duo to get an inside look into the program. They were also able to provide us with some compelling facts about family-owned businesses. Take a look.
North American family businesses account for 53% of the World’s 250 largest family businesses. 80% of the businesses in the United States are family businesses (J.H. Astrachan and M.C. Shanker, Family Business Review, 2003).
Influence of Family Businesses on American Economy:
- Employ 57% of North America’s workforce, estimated to be close to 97 Million employees.
- Generate 57% of the United States Gross Domestic Product (GDP)
- Create 70% of all new jobs in North America
- Provide 55% of all Charitable Donations
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Family Businesses Life Span and Longevity:
- The average life span of a family-owned business is 24 years (familybusinesscenter.com, 2010)
- About 40% of U.S. family-owned businesses turn into second-generation businesses, 13% are passed down successfully to a third generation and 3% to a fourth or beyond (Businessweek.com, 2010)
The high failure rate of family businesses to make it to the third generation is well documented, but an interesting question is why? What are the root causes of this failure? The Williams Group researched over 3,250 families to learn why the failures occurred and found that the primary causes of the failure were:
- Breakdown in trust and communication within the family represented 60% of the failure rate
- Unprepared next generation (25%)
IFBE explains below how it plans to help break the cycle of family-owned businesses that fail.
Can you explain the Initiative for Family Business and Entrepreneurship and why there is a need for this program?
Saint Joseph’s University has established the Initiative for Family Business and Entrepreneurship because we are passionate about seeing family businesses in the greater Philadelphia region grow and continue to enterprise from one generation to the next. A huge percentage of our region’s businesses are family-owned, and yet statistics show that only about 3 percent of family-owned businesses make it to the third generation. Family-owned businesses are a strength of this region, and we want to support them in beating the odds. Because a family-owned business is unlike any other kind of business, beating the odds calls for very specialized support, expertise and best practices, which Saint Joseph’s University now has in-house through the Initiative for Family Business and Entrepreneurship.
What’s one key thing you want family businesses to know about the program?
Our programming is not just for family businesses that are struggling or experiencing pain points with the family or business. Statistics show that far too often, family businesses are reactive with planning for the future, rather than proactive. If a family business is anticipating a transition to the next generation within the next 5-10 years, I would want them to know that the programming we are providing can help them to build a proactive strategy for the transition of their family business. Don’t wait until something unexpected happens! Additionally, our programming is a great way for the next-generation of family leadership to sharpen their skills and knowledge so that they are prepared and qualified for a leadership role in the future.
Can you explain how you become a member and its benefits?
We are a membership-based organization open to family-owned businesses, and the application process is online on our website sju.edu/ifbe. Members receive a combination of individualized one-on-one consultative services and opportunities to network and engage in peer-to-peer learning with other family businesses. Because we’re university-based, we are uniquely qualified and committed to developing and delivering educational programs and seminars that address the specialized issues and risks that face family businesses and the best practices that families can implement to mitigate these issues and risks. Being an external arm of the Haub School of Business, we’re also able to leverage the talents, skills and expertise of our world-class faculty.
What do you hope to accomplish this year with the program?
Much of our immediate focus is on advocacy and education surrounding the importance of family businesses to the greater Philadelphia region and educating family businesses that there is specialized support to help them with the very unique issues that come along with being a family-owned business. This year, we’d like to see family-owned businesses become a prominent and continual part of the conversation about economic growth and job creation in the region. We hope that we can start bringing together this dynamic community of family businesses through events and opportunities for peer-to-peer learning so they can build their own network of trusted advisors and peers.
What do you hope to achieve with the partnership with PIDC?
Because we share with PIDC a common mission to support the growth of businesses in Philadelphia, the partnership with PIDC is a natural fit. Although there is a good network of support for businesses in Philadelphia, the Initiative for Family Business and Entrepreneurship really fills a gap in providing specialized and personalized support and expertise to family businesses in our region. Through this partnership with PIDC, we strive to keep family businesses in Philadelphia thriving and enterprising in our region for years to come.
What geographical area do you service?
We are extremely passionate about supporting the greater Philadelphia region, as that’s our home and our community. Therefore, much of our current focus is on how to help and support greater Philadelphia’s family businesses (includes southern New Jersey). We do have the capability to work with any family business in Pennsylvania and beyond, but our greatest desire is to see our region’s family businesses grow and be successful with their transitions to the next generation.
Who should businesses contact for more information?
Interested family businesses should contact Mary Nicoletti, directly at (610) 660-2220 or email@example.com. We also have some great information and resources on our website (sju.edu/ifbe) and on our Facebook page (facebook.com/sjufamilybusiness).
PIDC and IFBE are on a mission to get family-owned businesses on the path for success. Below are two upcoming events and a useful article to get you started.
March 2, 2016
In partnership with the Greater Philadelphia Chamber of Commerce, the Initiative for Family Business and Entrepreneurship will host a Business After Hours at CFI: The Knoll Source from 5:30-7:30 p.m. More information is available here.
April 14, 2016
How to Thrive in a Family-Owned Business
Hosted by PIDC and Initiative for Family Business and Entrepreneurship
Learn about the resources available to meet the unique challenges of family-owned businesses. An expert panel of business owners from family-owned and operated companies will share challenges they have faced and successfully navigated to grow and develop their business in Philadelphia. More details to come.