Which States Have the Most Family-Owned Businesses? (And Other Family Business Statistics)

The U.S. Small Business Administration defines a family business as one that is majority-owned by at least two members of a family. Around 27.3% of businesses are family-owned — most of these are small businesses (fewer than 500 employees), and indeed 72.8% have fewer than 10 employees.

Family businesses are a crucial part of the U.S. economy, generating over half of the country’s GDP and employing between 26.70% and 46.74% of a state’s workforce, according to Census Bureau data. They are also a critical part of American culture, reinforcing the country’s entrepreneurial ethos and binding communities together. Family-owned businesses face many challenges — from competition with corporate chains to securing small business loans and business lines of credit. Yet they remain the backbone of the American economy and pillars of local communities.

To celebrate family-owned businesses, OnDeck analyzed the latest available Census Bureau data on family business prevalence, employment and wages to uncover the facts behind family-owned businesses in America. Wethen compared our findings to the previous year’s data to help reveal the trends facing family businesses in today’s economy.

What we did

We sourced data from the latest edition of the U.S. Census’ Annual Business Survey, which covers the 2022 reporting period, and compared those values to the 2021 version. We focused on three metrics in every state and large metropolitan area (above one million population): the percentage of family-owned businesses, the percentage of employees working at family businesses and the average pay at family-owned businesses.

Key findings

• Idaho is the state with the highest concentration of family businesses — 39.77% of all businesses, up from 39.45% the preceding year.
• In Idaho, 46.74% of all employees work for a family business — the most of any state.
• In New York, just 20.05% of all businesses are family-owned — the lowest figure of any state.
• The metropolitan area with the most family businesses is Tucson, Arizona (33.95%).
• The state where family business employees have the highest average annual pay is Massachusetts ($59,577).
• Family businesses in Kentucky pay the lowest average salary ($40,523).

How many family-owned businesses are there in the U.S.?

Around 27.3% of businesses are family-owned, according to the U.S. Small Business Administration. We found that the state with the highest concentration of family businesses is Idaho, where 39.77% of all businesses are family-owned — up from 39.45% the previous year. Idaho’s figures can be in part attributed to the state’s strong farming economy. There are 183,972 small businesses in Idaho, and of the state’s 24,000 farms, 95.6% are family-owned.

This propels Idaho over the previous top state, South Dakota, where the number of family businesses has fallen from 41.52% to 35.82%.

“It is evident that South Dakota small businesses are grappling with significant cost increases, burdensome taxes, and a sense of uncertainty,” said National Federation of Independent Business (NFIB) State Director Jason Glodt, in response to NFIB’s Small Business Problems and Priorities 2024. “The findings underscore the urgent need for pro-small business legislation to address the pressing issues identified in the report. I urge South Dakota lawmakers to take heed and support small businesses.”

No large (greater than one million population) metropolitan area quite matches Idaho’s or South Dakota’s figures. Tucson, AZ, is a large metro area with the highest proportion of family businesses, at 33.95%.

The large metro with the fewest family businesses is New York-Newark-Jersey City, where just 18.99% of firms are family-owned. This echoes the statewide statistics, where New York (20.05%) and New Jersey (21.60%) have the first and third fewest family businesses by proportion — the same positions these states held in the previous year’s statistics.

How many people do family-owned businesses employ in the U.S.?

In addition to being the states with the highest proportion of family-owned businesses, Idaho and South Dakota are also the states with the highest proportion of all employees who work for family businesses: 46.74% and 42.15%, respectively. Again, Idaho has taken South Dakota’s number one spot for this statistic.

However, more remarkably, Vermont has risen 41 places to become the state with the third-highest percentage of family-owned business employees, with its figure increasing from 30.00% to 39.62% year-over-year.

By contrast, Rhode Island has dropped by 41 places and is now the state with the eighth lowest proportion of employees at family-owned businesses, as its figure has dropped from 45.85% to 29.58%. This is at least in part due to a fall of six percentage points in the proportion of family businesses in Rhode Island, from 28.41% to 22.18%, over the same period.

The large metro area with the most family business employees is Tampa-St. Petersburg-Clearwater in Florida, where nearly half (48.00%) of all workers work for a family firm. Some 29% of area business owners are immigrants, and all of Florida’s family businesses can benefit from the absence of any statewide estate tax.

How much do family-owned businesses pay their employees in the U.S.?

Massachusetts is currently the best-paying state for family business employees in America, with the average salary rising from $55,003 to $59,577 year-on-year. New Jersey saw a similar increase, with salaries rising from $55,026 to $59,513, as the state became the second-best for pay at family businesses.

Hawaii has seen the most dramatic change, climbing 40 places from its previous position with the lowest family business wages, as the average salary rose from $33,410 to $50,878. This is significantly more than the 4% rise in Hawaii’s private industry workers’ earnings between 2021 and 2022.

Kentucky is the state where family businesses pay employees the least, despite the average rising from $37,846 to $40,523. The biggest fall in average pay was in Connecticut (from $57,087 to $47,870), which was previously the second-best state to get paid by a family business but is now number 22. South Carolina fell the furthest, from 18th to 48th, despite a slightly smaller drop in wages compared to Connecticut (-$7,456 versus -$9,217).

The large metro with the best salaries at family-owned businesses is Buffalo-Cheektowaga, NY, where the average is $66,987. The metro with the fewest family businesses, New York-Newark-Jersey City, is also among those with the best pay ($55,908).

What are the most successful family-owned businesses in America?

Many of America’s biggest businesses are family-owned. Here are five of the biggest to still be at least part-owned and managed by relatives of the founders.

• Walmart (Retail). Founded in 1962 in Rogers, Arkansas, by Sam Walton.
  • Walmart has risen to become the world’s biggest company by revenue, but the family still retains 45.5% of the company’s shares, and the chairman is Sam Walton’s grandson-in-law, Greg Penner.
• Ford Motor Company (Automotive). Founded in 1903 in Detroit, Michigan, by Henry Ford.
  • Henry Ford’s great-grandson, William Clay Ford Jr., remains the Executive Chairman. Between him, his three sisters, nine cousins and fifth-generation Fords, the family retains 40% of voting power in the company.
• Koch, Inc. (Multiple industries, including energy and trading). Founded in 1940 in Wichita, Kansas, by Fred C. Koch.
  • Cargill is America’s second-largest privately held company, and its CEO is Charles Koch, Fred’s son (the largest company, Cargill, is still owned by the Cargill family, but they no longer manage it).
• Tyson Foods (Food processing). Founded in 1935 in Springdale, Arkansas, by John W. Tyson.
  • Management of Tyson has been passed down along four generations of the family and is currently chaired by John H. Tyson, John W.’s grandson; John R.’s son, John R. Tyson, has also served in management roles.
• Nike, Inc. (Sports equipment and apparel). Founded as Blue Ribbon Sports in 1964 in Eugene, Oregon, by Bill Bowerman and Phil Knight.
  • Phil Knight started the business distributing shoes with his sports coach, Bill Bowerman, in 1964; today, Knight remains chairman emeritus, while his son Travis is on the board.

What are the biggest challenges faced by family-owned businesses?

Running a company as a family offers a special way to closely manage and develop your vision into a business with true integrity. But along with this energy and passion come challenges more or less unique to family-run businesses.

1. Clear roles. Many new businesses involve an ‘all hands on deck’ ethos that blurs the line between responsibilities. Since this can overlap with family life, it is vital for successful business management to clarify and formalize job roles even as they are evolving.
2. Financial boundaries. The crossover between personal finances, business costs and profit allocation can get complicated, particularly if family members wrongly assume their relatives are ‘on the same page.’ This can jeopardize the finances — as well as both the personal and business credit — of those involved. Establishing a board to manage financial decisions can help ensure that everyone feels they’re getting a fair deal.
3. Conflict resolution. Personal histories, home relationships and invisible hierarchies can make it difficult to spot an issue arising or to deal with it when it emerges. Don’t be afraid to seek outside mediation before it’s too late.
4. Succession planning. Strong leadership with family ties can make it harder to confront the issue of who will take over when the current leader can’t or won’t continue. Open discussion and timely preparation can help to see you through.

A small family business may be more agile and foster greater loyalty and dedication than larger corporate concerns. However, they may also lack the financial security of larger corporate concerns, and without careful governance, they can become bogged down with internal politics or outdated systems and assumptions. There are many types of family business, but all may benefit from objective appraisals of their economy, workflows and prospects.

Methodology

We sourced data from the latest edition of the U.S. Census’ Annual Business Survey, which covers the 2022 reporting period, and compared these values to the 2021 version.

We focused on three metrics in every state and large metropolitan area (above one million population):

• The percentage of family-owned businesses (as a percentage of all businesses in an area).
• The percentage of employees working at family businesses (as opposed to non-family-owned businesses).
• The average pay at family-owned businesses (we divided the total payroll by the total number of employees at family businesses in each location).

Data is correct as of August 2025.