Family-Owned Business Lessons Learned About Financial Clarity in Taiwan, Part 1
In March 2025, I attended the CSHCR Internationalization and Entrepreneurship in Family Business conference at National Sun Yat-sen University in Kaohsiung, Taiwan. The event offered valuable insights into how the global community views family-owned businesses, with research spanning banking practices to multi-generational and multi-national success factors.
Family-owned businesses are among the oldest forms of business ownership, often passing from one generation to the next. A local example is the family farm, where ownership transitions to a family member to continue the legacy. You likely have several family-owned businesses in your community, from small shops to larger enterprises. Globally, family businesses account for 90% of all enterprises, driving 70% of global GDP and 60% of global employment, underscoring their universal significance.
The world’s oldest family-owned business, Kongō Gumi, a Japanese construction company founded in 578 AD, exemplifies this model’s longevity. In Taiwan, family businesses are equally vital, contributing significantly to the economy despite challenges like the COVID-19 pandemic, with 41% reporting declining revenue in recent years due to trade disputes and economic disruptions. While the U.S. cannot claim such ancient businesses, family-owned enterprises are a cornerstone of its economy. There are 32.4 million family businesses in the United States, accounting for 87% of all business tax returns. They contribute 54% of private sector GDP (approximately $7.7 trillion) and employ 59% of the private sector workforce, totaling 83.3 million jobs. These businesses also generate 64% of U.S. GDP and account for 78% of new job creation, highlighting their role as economic drivers.
As a co-founder of Stewardship Advisors, a privately owned firm, I understand the effort required to build and sustain a business. At the conference, I explored global studies on family-owned businesses, many of which apply to my work with business owners and couples. One standout study from Cornell University in New York examined how family-owned businesses manage banking to achieve financial clarity.
The Cornell study partnered with a South American bank to identify family-owned businesses for research. Participants were divided into two groups: Group 1 had commingled family and business finances in a single bank account, while Group 2 maintained separate accounts for family and business. Over 16 months, researchers provided financial advice to improve the separation of finances. They followed up 12 months later to assess outcomes.
Surprisingly, Group 2, which started with separate accounts, grew faster and had a higher success rate, with more businesses remaining operational. These businesses also demonstrated a 6.65% higher return on assets (ROA) compared to non-family firms, reflecting their efficiency in leveraging resources. In contrast, Group 1, which began with commingled accounts, grew slower and experienced a higher closure rate than before the study. This outcome puzzled researchers, who expected Group 1 to benefit more from adopting separate accounts and financial controls.
Follow-up interviews with Group 1 revealed a critical insight: when financial controls were introduced, and family members were assigned income for their work, the shared vision that drove the business weakened. Family members became less willing to contribute unpaid or unscheduled work—a hallmark of family businesses, where 75% of entrepreneurs and 81% of established business owners globally co-own or co-manage with family members. In Group 1, as financial clarity disrupted this dynamic, some family members sought external employment to meet personal financial needs, further straining the business.
The study highlighted that financial clarity, while essential, must ensure all family members feel their financial needs are met. Without this, cohesion and shared purpose erode, hindering progress toward common goals. This principle applies not only to businesses but also to household finances. In my advisory work, I’ve seen couples transform when they achieve financial clarity. Anxiety and confusion give way to optimism and focus, but only when spending controls and financial structures align with both partners’ needs.
Globally, family businesses face significant challenges, particularly in succession planning. Only 30% of family businesses survive to the second generation, 12% to the third, and just 3–5% to the fourth and beyond. In Taiwan, succession is a pressing issue, with many businesses struggling to balance tradition with innovation to ensure longevity. Moreover, 72% of family businesses aim to keep the business in the family, but only 34% have a robust, documented succession plan, highlighting a critical gap in preparation.
Our relationship with money is shaped by our upbringing, and moving beyond those early lessons requires intentional effort. Teaching children sound financial principles is equally deliberate. For family-owned businesses, passing the torch is challenging, but those that succeed often leverage their long-term perspective—family businesses have an average ownership span of 78 years—and strong community ties to build resilience.
In my next blog, I’ll explore traits that enable family-owned businesses to thrive across generations and borders.
Schedule an introductory phone call with John at this link: Stewardship Advisors – Introductory Phone Call
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