A Study of Family-Owned Businesses Compared to Nonfamily Businesses

By Julio Herrera Velutini

Introduction

With a family background of more than 120 years in banking, Julio M. Herrera Velutini has played a prominent role in many major banking institutions throughout Latin America, eventually founding one of the largest banks in Brazil. As the principal of his family legacy and a prominent businessman in Puerto Rico, Julio M. Herrera Velutini has a unique insight into the intricacies of family-run businesses and how they compare to nonfamily businesses.

Business Ownership

When most people think of family businesses, they often think of local small and medium-sized businesses, but giants such as Ford, Walmart, Samsung, Porsche, and other family-centric firms account for nearly one-third of all global sales exceeding $1 billion. In various independent studies conducted in the U.S., the U.K., and Latin America, evidence suggests that, on average, family businesses tend to outperform nonfamily businesses over the long term.

Conclusion

According to a study published in the Harvard Business Review, CEOs of family-owned businesses tend to adopt a more conservative approach to growth. Although this strategy leads family businesses to underperform compared to nonfamily businesses in a thriving economy, it also allows them to better withstand tough economic times and expand responsibly over time, ensuring long-term continuity.