The longevity of the family business

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The Kongo Gumi Company, a Japanese construction firm, holds the title of the oldest continuously operating family business in the world. Founded in 578 AD, it remained in the hands of the Kongo family for over 1,400 years until it was absorbed by a larger construction company in 2006. This anecdote highlights the impressive lifespan that multigenerational family businesses can achieve.

 

According to a study by Credit Suisse, family businesses have a longer lifespan compared to non-family businesses. The study found that the average lifespan of a family business is 24 years, longer than that of a non-family business of 16 years.

 

Another study by PwC found that 69% of family businesses in the United States had second-generation ownership, while 46% had third-generation ownership or higher. This indicates that multigenerational family businesses are not uncommon, and many have been able to successfully transfer ownership from one generation to the next.

 

Another study by McKinsey & Company found that family businesses with more than $500 million in revenue have a higher survival rate than their smaller counterparts. In fact, 70% of large family businesses survive into the second generation, while 40% make it to the third generation and beyond. This indicates that the larger the family business, the longer the lifespan.