Women Are Changing the Way Family Firms Do Business

The "face" of family businesses is changing-and it's definitely becoming more feminine.

According to a new study, Women in Family-Owned Businesses, woman-owned family businesses are not only a growing segment of the U.S. economy-they're also on average more productive than those run by men, are a decade younger, and are more likely to be a "good corporate citizen." Female owners also tend to pay greater attention to planning leadership succession.

The study is sponsored by MassMutual Financial Group and Babson College.

The study indicates woman-owned family businesses had average annual revenues of $26.9 million in 2002. Some reported annual sales as high as $1 billion. Most woman-owned family firms are in the second generation of operation. They are primarily active in the same industries as male-owned firms: manufacturing, wholesale, retail, service and construction.

Highlights of the study show that woman-owned family businesses:

• Have increased by 37 percent in the last five years, to 15.6 percent across the U.S.
• Place greater proportionate emphasis on social responsibility, directing their philanthropic focus toward educational and community organizations.
• Are more than six times as likely to have a woman chief executive officer (roughly half are led by females). While woman-owned family businesses are typically 10 years younger than those owned by men, the average age of their owners is nearly identical. Nonetheless, female owners assumed leadership at an age five years older than their male counterparts.
• Focus more carefully on CEO succession planning and are more likely to have chosen a follow-on chief executive.
• Tend to be more fiscally conservative. More female-owned family businesses carry less debt than male-owned firms.

"Family-owned businesses are the lifeblood of the American economy and, increasingly, women are playing leadership roles," said Susan Sweetser, second vice president of the Massachusetts Mutual Life Insurance Company (MassMutual). "Clearly, as the Babson College/MassMutual Financial Group report demonstrates, women are making great strides in the business world and they are building on their successes at a tremendous pace."

MassMutual Financial Group is a global diversified financial services organization whose member companies have over $240 billion in assets under management.

The number of woman-owned family businesses has increased by 37 percent over the last five years.

Courtesy of NAPSnet.