Chapter 6: Small Business as Family Business

Not all small businesses are family businesses, and conversely. However, there is an overlap, and family ownership and management are especially common in the smallest size range. Accordingly, this chapter will review some research on family businesses, which, in practice, are mostly small and medium enterprises (SMEs). In particular, if a small business relies a great deal on family labor, in both managerial and other activities, will this be an advantage or a disadvantage relative to other businesses that do not rely on family labor? A case can be made for both possibilities. We will not be concerned with the succession from one family manager to another in this chapter; however, that will be discussed in a later chapter.