A lot has been documented about the importance of the entrepreneur’s access to financial capital, as well as educational achievement and progress, to the enterprise’s ultimate success. The family background of an entrepreneur is often an unrecognized aspect of success. Few facts regarding the role of family for entrepreneurs are −
● Two to three times more business is owned by the children of industrialists than those whose parents don’t own a business. So it is pretty clear that, business ownership runs within the family but the question here is does it lead to success?
● Entrepreneurs working in their family business before starting a business of their own, tend to be 10 to 40 percent more successful than they would be otherwise.
● The would-be entrepreneur gains valuable experience through informal learning and apprenticeship that occurs while working in a family business.
● Who can teach us better than our own parents? A brilliant way of learning the “name of the game” of running an own business is first working in the family business.
● Family business is a golden ticket for family members to hold human capital linked to operating a business. It is not necessary to gain this experience in the same industry, probably because basic business experience is what counts.
The major scope through which families shift their business success across generations is by working through experience. However, a major drawback is the cycle of low rates of business ownership could be easily broken and relatively worse business outcomes could be passed from one generation to the next. It is very important to address the lack of opportunities to work in family businesses.