The mom and pop store – legendary in America – is considered by many to be an important part of the social, if not the economical, landscape of the U.S.
Defined as a small, family-owned business that is independent of investors and shareholders, mom and pop stores are often one building in one location.
The number of employees is usually low, as is business volume. Customers who shop at mom and pop stores enjoy the good customer service and friendly chatter. The problem these small businesses face, though, is that they often live in the shadow of large corporations who they struggle to compete with.
Nineties U.S. sitcom Seinfeld showcased the struggle of mom and pop stores around the world in the episode “The Mom and Pop Store” in which Kramer learns that a local store is on the verge of closing due to a lack of business. He convinces his friend Jerry to have his collection of shoes repaired at the store, only to return at a later date to find that the mom and pop store has finally given up the ghost and closed – and taken all the shoes with them!
But while it’s easy to make family-owned businesses synonymous with the mom and pop store, the truth is that there are numerous big businesses that are owned by families, too. Some of the world’s largest corporations – including Ford and Wal-Mart- are in the hands of families, which dispels the idea that family-run businesses are never more than genial, local stores that are always competing against the big guy. Sometimes, the family is the big guy!
Working so closely with family can of course lead to conflict, but knowing each other’s strengths can also be the key to success.
In celebration of families who have grown their businesses on a massive scale, here is a look at five family-owned businesses who prove that when families stick together, they win together.
- Hyundai Motor
Hyundai Motor is located in the burgeoning economy of South Korea, and is owned by the wealthy Chung family. It operates in the automotive sector, and is in the process of steadily revising its brand so that it’s no longer seen as the “budget” choice for car-owners. Its revenue in 2013 was $79.76 billion.
Currently, Hyundai is the fourth biggest automaker in the world, and is in the process of building its very own Hyundai-theme park. Not bad for a family-run business, huh?
And the thing is, there are lots of family-owned businesses in the prosperous east, including Sun Hung Kai Properties and FoxConn.
- BMW Group
Also operating in the automotive sector, a lot of people are often surprised when they learn that BMW Group is actually owned by a family – the mega-rich Quandt family to be exact, who are actually the wealthiest family in Germany.
Based in Germany, BMW posted a profit of $100.97 billion in 2013 and currently has its sights set on the lucrative electric car market, where it hopes to compete with the likes of Tesla and Toyota for huge future profits.
Wal-Mart is arguably the most successful family-run business of all time. Overshadowing all mom and pop general stores, Wal-Mart sells everything from chicken drumsticks to guns. In 2013, the retail chain – which is owned by the wealthy Walton family – posted a profit of almost $500,000,000.
As well as being the biggest family business in the entire universe, Wal-Mart is also actually the biggest company on the planet, too. Although it’s often cast as villainous and evil, the guys behind Wal-Mart have been savvy enough to make their unpopularity work for them, and have now lowered their outlook.
- Patek Philippe
Patek Philippe is one of over 600 Swiss luxury watchmaker’s. Now into its 177th-year, it’s also the city of Geneva’s oldest family-owned watchmaker.
The company wasn’t always family-owned, but since the Stern family acquired it in 1932, it has remained – and prospered – in family hands for four generations.
The Stern family believes the backbone to their success with Patek Philippe is down to three things in particular:
- Quality not quantity – Aiming their product at high net worth customers and distinguishing their brand by heritage, pricing and excellence
- The family is directly involved with their business – The Stern family has been personally involved with the company since they took it over. As well as being on the board, the also get involved with the operating side of things, and Mr. Stern himself helps to develop the brand’s products.
- Unprepared to rush the next generation – The Stern family won’t force their sons, daughters and cousins into joining the business. “My role as a father is to teach them the right values, but it needs to be their decision to get involved,” said Mr. Stern.
His words are instructive. Do you really own a family business? Or are they just keeping it ticking until the next generation takes the reigns?
- Tata Consultancy Services
Tata Consultancy Services is a subsidiary of India’s biggest company Tata Group, and it’s also ran by Tata Sons, one of the wealthiest families in the world.
Tata Consultancy operates in the Information Technology sector, and has a market cap of $80,000,000. Around sixty-six percent of the holding company’s shares are currently controlled by the Tata family, while the organization itself was first founded way back in 1868.
Everyone has heard of Nike, and many of us have no doubt worn Nike products at some point in our lives. Famous for their “Just Do It” slogan, Nike are probably less famous for being a family-run business.
With a market cap of $88.2 billion, Nike are owned by the affluent Knight family. Founder Phil Knight is still the face of the brand he conceived back in 1964, although he is preparing to step down this year. Son Travis will be handed a seat on the board so that the family legacy continues.
The proof is in the pudding. Although lots of us like to believe in the idea that family-run businesses are nothing more than a local, rundown general store that offers a smile with a bagel, the reality is that families can be as ambitious and as powerful as individual entrepreneurs.
So what’s the top tip? Keep it in the family.