Size matters in the US, which is home to some of the world’s biggest family businesses. The country’s five largest family-controlled firms – Walmart, Ford, Cargill, Koch Industries and Comcast – had combined revenues of $911.9 billion (€694.8 billion) in 2012, more than Indonesia’s GDP.
Walmart, a heavyweight in major indexes of quoted companies such as the S&P 500, alone reported sales of $466.1 billion last year, more than double the revenues of German carmaker Volkswagen, which is Europe’s biggest family firm by far, and South Korean family-controlled giant Samsung Electronics.
With a population of 320 million, the US market is huge and a family business can have multi-billion-dollar revenues even if it operates in only a few states. Supermarket chain Giant Eagle, which has stores in Ohio, Pennsylvania, West Virginia and Maryland, turns more than $9 billion for example, while revenues at Texas-based HEB Grocery, which is controlled by the Butt family, have topped $15 billion.
Many of these companies are based in the so-called “rust belt” of the US, an area spanning across the mid-west and north-east of the country. And almost a third operate in the manufacturing industry, including popular names such as household goods firm SC Johnson, WL Gore & Associates, the company that produces the famous Gore-Tex fabrics, and drink-maker Brown-Forman, which is behind brands such as Jack Daniel’s and Southern Comfort whiskeys.
The US produced some of the world’s greatest businesspeople, so it should come as no surprise that American family businesses tend to be very entrepreneurial. According to a recent survey by the Conway Center for Family Business, during their lifetime US family companies control on average 6.1 firms, set up 5.4 firms from scratch and create 2.7 through mergers and acquisitions. They also spin off 1.5 companies and change sector twice.
However, unlike the European Union, the US government doesn’t have an official definition of family business, something that may explain why 76% of the country’s family firms feel that policymakers don’t fully understand their needs. Succession may also pose a big challenge in the future – by 2017 more than four in 10 of the country’s family business owners expect to retire, but less than half of them have already selected a successor.