9/16/99

Contacts:
Mary Winter, Family and Consumer Sciences, (515) 294-5982
Nancy Miller, Textiles and Clothing, (515) 294-1930
Barbara McManus, Agriculture Information, (515) 294-0707

STUDY OFFERS STRATEGIES FOR FAMILY BUSINESSES

AMES -- Balancing family responsibilities in a family-owned business requires some juggling. To find out how families cope, Iowa State University researchers surveyed more than 1,100 families across the country.

"We were trying to understand the mix between business and family," said Mary Winter, associate dean of the College of Family and Consumer Sciences. "Most research has looked at these businesses from the business point of view. That work loses sight of the idea that very often the business has been started for the family."

The family-owned businesses surveyed in 1997 had been in operation for at least one year and 41 percent were service-based businesses. Fifty-seven percent of the businesses were operated from a home. One-third were owned by women. More than half were located in communities with a population of less than 10,000.

Researchers asked families how they juggle responsibilities in hectic times. Nancy Miller, Iowa State University textile and clothing professor, said, "We interviewed the person who managed the home and the person who managed the business. Sometimes they were the same person."

The study indicated that family members who held both roles had a more fluid relationship between home and business duties. These managers would take their home responsibilities into the office or take their business duties home.

In situations where household and business managers were held by two individuals, household managers tended to devote extra time to the business. Household managers would put off chores, lose sleep and hire temporary help in order to help with the business.

Most families were happy with both the business and family relationships. Sixty-five percent of the household managers said their families were successful in building good relationships and 87 percent said they were satisfied with their role in the business.

The survey indicated that the business often takes priority. Winter said families were adaptable and flexible in keeping the business going. "Very often in tough times it is the family business that survives because a family member is more committed than an employee," Winter said.

The researchers said the findings offer suggestions for consultants and outreach agents who work with family businesses. In businesses with two people sharing the responsibilities, the study recommends defining their roles. "It may be important that clarity exist about who does what, so that problems associated with an invasion of territory are minimized," Winter said.

There are 18 million families engaged in family businesses in the United States. Some of the businesses surveyed were legal aid, child care, commercial art, automobile restoration, tool and equipment repair, painting, trucking, farming, beauty and hair needs and other occupations.

Researchers took a unique approach in finding the family-owned businesses. They called more than 14,000 residential phone numbers instead of searching a business directory. Winter said the small family-owned businesses aren't always listed in these directories, so the household-based approach provided a more accurate picture.

Researchers plan to survey the families again before the end of 1999 to measure the economic characteristics in the surrounding community. They will ask about changes that have occurred in the businesses and communities since 1997. The College of Family and Consumer Sciences will use some of the research in a new course to be offered on business entrepreneurship in the spring semester of 2000.

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