Who says business and pleasure don’t mix? Not these family business owners



Last modified: Thursday, March 05, 2015

Running a family-owned business has rewards — and also challenges — unique to businesses owned by members of the same family, say those in the field.

The most notorious local example of a family business gone awry is the Market Basket debacle of last summer, when a long-simmering dispute over ownership and bad blood between two factions of the family led to employee strikes, customer boycotts, and empty shelves until the situation was resolved in August.

But there are definite upsides to going into business with a relative. Namely, having dedicated time together and a full understanding of each other’s work, say Tom and Janine Giles, owners of the Hadley Garden Center in Hadley since 1988.

“You get to the end of day and you pretty much know what kind of day your partner has had. We have an appreciation for what the other one does versus working at two different places,” Janine Giles said.

Her husband says he likes the certainty that his co-worker will meet her responsibilities.

“There is a great deal of trust that the other person is doing what needs to be done. And vice versa,” he said. “It takes a lot pressure off each of us when there is that kind of trust and understanding.”

Ira Bryck, director of the UMass Amherst Family Business Center in Hadley, said there are a number of trends in this business arena, including that family-owned businesses are becoming more “business focused.”

By that he means they strive to place both family members and non-family members in the jobs they have the talent to handle — and not just creating employment for their relatives, he said. In general, family businesses in the region are hiring more non-family managers for key positions, he said.

“Baby boomers are aging and this generation is retiring so there’s not as many people to fill the upper ranks as there were before because the millennials are a smaller generation,” he said.

“We are finding that there’s lot more focus on getting talented people in all the right positions whether they are family or not.”

Bryck and others interviewed for this story said they don’t have data about whether the ranks of family-owned businesses in the region have risen or declined over the years.

Michael Vann, principal at the Vann Group in the Indian Orchard section of Springfield, agrees that the baby boomer generation has issues to contend with in family-owned businesses. The Vann Group works with businesses on succession planning — handing over power to the next generation. Anecdotally, Vann said he has seen in recent years more owners of family businesses grapple with whether their children will take over.

“We are seeing a number of businesses up for sale because the children do not want to go into the business. They would rather do something else and not deal with the pressure and stress of operating the family business and the sacrifice and risk that comes with being an entrepreneur,” Vann said. “Or sometimes the children don’t want to work in the business because are they not capable of operating it or buying it or taking it to the next level.”

Family-run businesses face challenges for the future when the parents have either retired or died, Bryck said.

“When I started this business 20 years ago a lot of parents were working with their children. And once the parents are gone some of those children now say ‘why do we need to work together anymore? Dad or mom only brought us in because we needed jobs,’” he said.

And as families look to future leadership of the business, the key players must have serious discussions about who will ultimately lead it, advises Bryck.

“Parents should talk to their children early on to determine if they see themselves loving the company enough to start investing in them or if it’s just a job for them,” he said.

When parents question whether their son or daughter is capable of running the business, sometimes it comes down to a lack of mentoring, Vann said.

“Founders are very dynamic, self-motivated and smart people so it’s hard for them to let go of the business and I think it impacts the transition to the next generation,” he said. “Owners need to make sure they are serving as good mentors and that the children have the right skill sets to run the family business.”

In the mid-70s, the revitalization of the downtown Northampton business community took hold in part because of a growing number of family-owned businesses, said Suzanne Beck, executive director of the Greater Northampton Chamber of Commerce. Now 40 years later, the question is how that aging population of family owners could affect the future of the downtown businesses, she said.

“What kind of succession plans are in place with the family? How is that going to play out in terms of turnover in an area that has been very dependent on a lot of continuity and consistency in terms of a mix of business types” she said.

In Hampshire County, family-owned businesses have had a strong tradition of commitment to the community, to school systems, to charitable causes and to service organizations, Beck said. If there is a different ownership structure because families will not continue to operate their businesses then that community support could change, she said.

While any business could face operating challenges, family-owned ones must contend with “the already topsy-turvy business dynamic with the family dynamic,” Beck said.

“Obviously there are people able to bring those challenges together in a very successful way. I marvel at a husband- and wife-run business and how they can be successful at both,” she said. “It takes a special kind of person to be able to live in both of those worlds and keep them separate when they need to be separate and use them to the best of their advantage when they need to.” Some local owners of family-run businesses say they understood going into such a business structure that good comes with the bad in running a company with relatives.

When the children of owners are introduced into the family business, it creates a whole new set of dynamics, said Brian Campedelli, 45, who along with his wife, Rebecca Thomas, 50, have operated Pioneer Landscapes in Easthampton since 1989. Their teen-age children, Tony, 17, and Alesandra, 14, have already helped with lawn mowing, snow removal and other tasks of the business.

“Our children see what we go through — both the good and the bad, the stress and the non-stress.

They also get a real sense what it is like to work and make ends meet,” Campedelli said. “They save their own money and they know the value of money because they have had to work for it.”

For Nick and Keren Rhodes, both 34 and owners of the Glazed Doughnut Shop in Amherst, one of the challenges of sharing ownership of the business is that they are operating on income from one source.

“Neither of us has another job. It’s not like one of us pulling a paycheck from somewhere else. We are both counting on the financial success of the business,” Keren Rhodes said.

While the couple relies on managers and other staff to run the donut business, they are continually working on other aspects of the shop to keep it running, such as purchasing supplies and handling the finances, she said.

“The job is completely absorbing. Even though we don’t have to be in the store every day at some time there is always something going on that needs our attention,” Keren Rhodes said.

The Rhodes couple offers some advice for would-be family-run business owners: dive in 100 percent.

“People have an impression that since we are not at the store that we just sit home and do nothing. But that is a wrong impression,” she said. “If want to start a business you have to be all in. There’s no stepping away. You have to be prepared for that.”


 


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