Family businesses are the oldest and most wide-spread form of business structure, and possess the potential to be the most powerful business structure in the economy. Some of the most powerful and recognizable companies in the world have been developed from, and still are, family businesses. A family business is an entrepreneurial structure where "ownership" and the "business" are in the same hands, or at least overlap. They come in all shapes and sizes and range from multinational giants, such as Walmart, to the corner "mom and pop" store. It's estimated that in the United States, 65 to 80 percent of all business enterprises are owned or managed by families. Family businesses can be very successful but with success brings many challenges and complications that can happen in the family and/or in the business. The easiest and most efficient way to describe or show the family business dynamic would be to show the three-circle model of family business. .
This family business model shows the business system as three independent but overlapping categories. Each category in the Venn diagram has its independent characteristics, but can also overlap the other categories. Each circle in the three-circle model of family business contains certain dynamics that apply to each category. The family consists of shared values, conflict patterns, decision-making, rules, roles and relationships, communication styles, life cycles and shared experiences. The business dynamic consists of mission and strategy, structure and systems, organizational culture, technology and business processes. The ownership dynamic consists of shareholder value, ownership distribution, governance and board and legal and regulatory. The beautiful thing about family business is that the family, ownership and the business itself can all work harmoniously together to create something that's successful over a long period of time.