Family-owned businesses are more than just your local mom-and-pop shop; they’re also a major part of what makes America tick. ed down through generations, these businesses shape communities and play a vital role in the national economy.
But how are these family-run businesses faring in the age of mega-corporations and ever-expanding franchise chains?
The research team at financing specialist OnDeck wanted to find out. So they collected and analyzed tons of data from the US Census Bureau to show which US states have the highest (and lowest) percentage of family-owned businesses.
Here’s an overview of the results.
US states with the highest % of family-owned businesses
Business is a family affair in South Dakota. Over 4 out of 10 (41%) businesses in The Cowboy State are owned and run by a family, making South Dakota the most family-business-friendly state in the entire USA.
The % of family-run businesses in metro areas across the USA
The San Antonio-New Braunfels area in Texas is the US metro area boasting the highest proportion of family-owned businesses (34.11%).
A look at the other end of the chart takes us to the state of New York. The Rochester metro area isn’t renowned for its mom-and-pop stores, as only 16% of all businesses in the New York state metro are in family hands.
States where the % of family-owned businesses is rising
Family businesses, at least the new ones, aren’t exactly booming across the USA. But there are some areas where the % of businesses owned and ed down by relatives is on the rise, albeit rather modestly.
The highest growth area for family-owned businesses is in Delaware. The OnDeck study shows that these types of enterprises operating in the state grew by almost 4% between 2020-2021.
Trends in the % of family-owned businesses within US metro areas
Things are (a little brighter) when looking at the data on US metro areas.
Family-owned businesses grew 5.69% within the Memphis metro area during 2020-2021.
There was also notable growth in the Fresno and Salt Lake City metros. By the end of 2021, both metros had 4% more family-owned businesses.
States where family-owned businesses hire the most staff
Just under half (46%) of Maine’s working-age population is employed by a family business.
Other states where family-run businesses are big employers include South Dakota (45%), Minnesota (41%), and Washington (40%).
Metros with the highest % of people working at family run business
Utah’s Salt Lake City metro area is famous for its emphasis on traditional family values. So it’s no surprise that it has the highest percentage of people working at a family company—nearly one out of two workers in Salt Lake City clock in at a family-owned business.
Earning big bucks at a family-owned business
Oregon is the best place to work for a family-owned company, at least in of pay. On average, people employed by family-run businesses in Oregon make $60,000 per year.
The highest-paying metro areas
Workers in the Birmingham-Hoover metro area in Alabama are the highest earners in this last of the study. Ondeck’s data shows that they take home over $71,000.
Employees at family-run businesses in the Urban-Honolulu metro are the lowest paid, making an average annual salary of just $30,000.
