In my profession, I deal with different types of businesses every day. An often neglected type is family business. They are crucial because European family businesses generate between 35% and 65% of the gross national product (GNP) of member states.
In Europe, around 75% of businesses are family run and account for about 40% to 50% of employment. These businesses can be found everywhere in the world. However, in Germany such companies are often called “Mittelstand” businesses. It is rather noteworthy that 4 out of 10 rich families are based in Germany. In the UK for example, there are a few examples of large family businesses with annual sales of more than £1bn according to the FT.
A large proportion of these family run businesses are SMEs and are composed of micro enterprises with less than 10 employees, whilst some of the biggest European companies are still controlled by the founding families. These enterprises are active in all sectors of the economy, particularly in the more traditional and labour intensive sectors. However, a shift towards more modern industries is taking place. As the Financial Times pointed out “the private ownership of such companies – often a family that has been in control for generations – gives them a long-term approach frequently absent in the case of conventional publicly quoted companies. The chief executives of these companies tend to have a drive and a vision, plus an in-depth knowledge about the sector that you don’t always see in listed businesses.”
Although empirical data is hardly available to validate the importance of family businesses, some sources show that they represent significant contribution to the economy because of their commitment to local communities, the stability they bring, the responsibilities owners feel towards society and the traditional values they stand for.
According to Tapies and Ward “family businesses must be seen not only in terms of assets but as a combination of property and values. That is, family businesses have implications that involve more than merely serving a financial purpose; they are a means of sharing certain values and providing a service to the community in which they are integrated”. In addition, studying the way they have remained strong, even in the difficult competitive of recent years, provides clues as to how to encourage the successful companies of the future.
Top 10 of richest families (according to their family wealth) in Europe:
- Karl & Theo Albrecht and family, Germany (Supermarkets, £18.4bn)
- Johanna Quandt and family, Germany (Cars, £11.9bn)
- The Herz family, Germany (Coffee, £7.4bn)
- The Brenninkmeyer family, Holland (Retail, £7.1bn)
- The Oeri/Hoffmann family, Switzerland (Pharmaceuticals, £6.8bn)
- Michael Otto and family, Germany (Retail, £5.9bn)
- Luciano Benetton and family, Italy (Fashion, £5.8bn)
- Michele Ferrero and family, Italy (Chocolates, £5.7bn)
- Spiro Latsis and family, Greece (Shipping, £5.2bn)
- Serge Dassault and family, France (Aerospace, £4.9bn)