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September 12, 2012updated 04 Apr 2017 3:35pm

60% of family businesses soar despite downturn

Almost two-thirds of family businesses have reported revenue growth of at least 5% in the prior year outperforming many of their larger rivals, research from Credit Suisse has found The research, conducted by the Credit Suisse Research Institute and Ernst & Young, found that despite the Eurozone crisis and slow economic growth, family businesses are succeeding, while other businesses struggle to create revenue.

By Lizabeth Davis

Almost two-thirds of family businesses have reported revenue growth of at least 5% in the prior year outperforming many of their larger rivals, research from Credit Suisse has found.

The research, conducted by the Credit Suisse Research Institute and Ernst & Young, found that despite the Eurozone crisis and slow economic growth, family businesses are succeeding, while other businesses struggle to create revenue.

 

Family Index outperforms market by 8%

Credit Suisse said that over the past five years its Family Business Index had outperformed the market by 8%.

It said that by focusing on long-term investment family businesses were able to outperform public companies.

The research based on a survey of members of the Family Business Network International (FBN-I) gathered from 33 countries, considers various types family businesses including listed and nonlisted, and issues faced by the businesses, such as sustainability and governance.

 

Six keys to family business success

Credit Suisse said that its research shows that there were six key characteristics that were responsible for the success of family businesses over the last few years.

  • Performance and resilience –robust management of the Eurozone credit crisis leading to growth
  • A long-term perspective – which incorporates a ‘quality first’ approach
  • Sticking together – ensuring that business maintain family-governance
  • Sustainability – both financially and socially

 

Michael O’Sullivan, head of portfolio strategy & thematic research at Credit Suisse Private Banking, said: “The family business model, centered on a longer-term focus, cohesion and awareness of sustainability issues, and an emphasis on the importance of product quality, is not only proving to be a vital engine of economic activity, but also the antidote to some of the structural failings uncovered by the financial crisis.”

 

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