In Philadelphia, the spirit of family is woven into the fabric of the city. Known for its tight-knit communities and strong cultural ties, it’s no surprise that many Philly-based entrepreneurs are looking to family bonds as the backbone of business success. While some view mixing family and business with caution, recent insights suggest that family bonds can be a powerful asset in the entrepreneurial world, providing a unique foundation of trust, loyalty, and resilience.
For some, the idea of working with family might seem daunting. It’s true that combining family relationships with business decisions can add a layer of complexity, but it can also lead to a high level of dedication and mutual support that’s hard to find in traditional work relationships. Studies reveal that family-run businesses consistently outperform non-family-run businesses in terms of longevity and stability. According to a report from the Harvard Business Review, family-owned businesses account for 64% of the U.S. gross domestic product and employ 62% of the country’s workforce, proving their substantial impact on the economy.
Michael A. Scarpati, the CEO of Philly-based company RetireUS, understands the value of family bonds in business. Having built RetireUS alongside people he grew up with, Scarpati believes that a close-knit team built on friendship and family-like relationships is a game-changer for business culture. “Any business aiming to build a truly successful culture tries to create a family-like bond among its people, that’s the goal. So why not just start with family?” he says. For Scarpati, having colleagues who genuinely care about each other’s well-being has transformed even the most challenging days into a shared experience of growth.
Working with family can provide a deep sense of loyalty, which is beneficial when navigating the unpredictable path of entrepreneurship. When facing financial risks or market fluctuations, family members or close friends in the business are more likely to stick together, providing emotional and financial support. This shared resilience can help family-run companies stay afloat during tough times, as they prioritize long-term growth over short-term gains. In fact, a PwC Family Business Survey found that family-owned businesses are 42% more likely to reinvest profits into their companies rather than distribute them as dividends, a trend that underscores their focus on sustainability and future success.
Of course, running a family or friend-founded business isn’t without its challenges. Differences in opinion can lead to tensions, especially when personal and professional lives overlap. Scarpati emphasizes the importance of open communication and clearly defined roles in navigating these complexities. “When your teammates are people you trust deeply, the trust makes those difficult conversations easier to navigate. Problem-solving with your best friends doesn’t feel like a task; it’s an opportunity to collaborate and create something meaningful together,” he explains. By setting boundaries and respecting each other’s perspectives, Scarpati has found that working with family can be an experience that’s both rewarding and motivating.
This focus on trust and loyalty doesn’t just benefit the business internally; it often strengthens relationships with clients and the local community as well. When people see a business run by family or close friends, there’s a sense of authenticity that can build customer loyalty. Consumers are increasingly looking for companies with values that resonate, and family-owned businesses often embody a level of commitment and care that’s tangible.
In a city like Philadelphia, where community values run deep, businesses built on family and friendship have the potential to create a meaningful impact. RetireUS, which aims to help people achieve financial independence, exemplifies this approach. Founded by Scarpati and his close-knit team, the company is dedicated to providing accessible financial strategies for retirement. The fact that it was born from trusted relationships among friends reinforces the company’s mission to offer genuine guidance to its clients.
For those considering starting a business with family or friends, Scarpati offers valuable advice: “I’d say go for it. Make sure you establish open communication, define roles, and remember to respect each other’s perspectives. In the end, it’s about more than success; it’s about building something special with people that you love.”
Whether it’s through family ties or a community-focused mission, Philadelphia businesses have a unique opportunity to leverage personal connections to drive their success. In a landscape where trust and loyalty are becoming increasingly rare, family bonds may indeed be the missing link for local businesses striving to thrive in Philly’s competitive environment.
Photo by Keith McCrea