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November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Wednesday, November 05, 2003
Business Success Runs in the Family
Individuals with experience working in a family-owned business are much more likely to be successful in their own businesses.
A recent study by two university professors, Dr. Robert Fairlie and Dr. Alicia Robb, indicates that simply having a relative who owned a business was not the key factor--the entrepreneur had to actually work in the business. "The main effect...appears to be through the informal learning or apprenticeship type training that occurs in working at a family business and not from simply having a self-employed family member."
In fact, experience working for a family member's business turns out to have a greater impact on success than other, non-family managerial experience. The authors theorize that individuals working in a family business acquire important general business acumen. That acumen is more important than industry knowledge or technical skills.
Bankers and venture capitalists take note: a factor to consider in gauging the potential success of an entrepreneur appears to be work experience in a family-owned business. You might want to include this as one of many screening factors.
Also, this finding suggests the importance of mentorships, apprenticeships and work experience in entrepreneur assistance.