In Mexico, family businesses are the backbone of the economy. Most of them begin with an idea and the wish to generate jobs and wealth for the family. In order to succeed they must overcome many challenges. In fact, very few survive de transition to the second generation and even less to the third. However, the largest family businesses in the world have demonstrated that it is possible to succeed even when dreaming big.
A new study by the center for Family Businesses at the University of St. Gallen in Switzerland, lists the 500 largest companies in to world that are family owned, based on their income. The study notes that family businesses, which make up between 80 and 90% of companies worldwide, are an important contributor to the GDP, employment growth, and development.
In Mexico alone, more than 90% of the firms listed on the Mexican Stock values have a clear family representation in terms of capital and business control.
According to the Business Family Foundation, Mexico ranks fifth in family businesses in the world. This study which includes the 250 largest companies, lists companies such as Grupo Carso, Cemex, Grupo Bimbo, Soriana, Chedraui, Casa Saba, Grupo Bal, Femsa and Grupo Maseca.
“United States in the country with most family businesses, in Europe there is a great tradition, but in Latin America, we are leaders.” – Oscar Santamaria, BFF consulter.
Mexican family businesses are in different sectors such as food, beverage, bakery products, media, real estate, supermarkets, textiles and transport, which represents about 90 percent of all companies operating in the country.
In the study of the University of St. Gallen, Mexican family business America Movil is in the 17th place of the top 500, with an income of $61,600 million dollars and 163,524 employees.
So, what have the families included in the rankings done differently than the rest, in order to achieve such success while maintaining family control?
“They are far superior in the generational transition,” says Peter Englisch, the leading global index family center of excellence in global business EY family, which supported the Center for Family Business of St. Gallen for the project. “It is a surprising fact that 44% of companies in the Family 500 are owned by the fourth generation or more; this contrasts with less than 5% of businesses in general.”
The key lies in the business transition to the next generation, that is succession planning. It is crucial for every family business to have a succession plan early in time, even when is not apparently necessary. Under a strategy of revision and monitoring, a well written and executed succession plan can maintain a family business succeeding for generations. Click here to download our family business guides.