Recruiting and retaining good employees, promoting people based on ability and not on family connections and planning who will run the business when the founder retires are key elements to operating a successful family business, experts and owners say.
"I think (family) business owners need to realize it is more important what you can do for your business, than what the business can do for you," said Thomas Bryan, a civil engineer and manager at Frank Bryan Inc., a construction materials supply business in McKees Rocks and theSouth Side.
"You have to be an employee like any other employee," regardless of family ties to whoever runs the business, said Bryan, 50.
The business, which has about 50 employees, was founded 125 years ago by his great-grandfather Frank Bryan.
Family businesses in Western Pennsylvania were celebrated Wednesday by the nonprofit Family Business Roundtable of Western Pennsylvania and by Pittsburgh 250 during a program at the Sen. John Heinz Pittsburgh Regional History Center in the Strip District.
It remains a family affair at Frank Bryan Inc. Thomas Bryan's late father, Tom "Tink" Bryan, was president. One of his father's cousins, James, is a vice president, and another of his father's cousins, Bob, is secretary-treasurer. Thomas' brother, David, is a civil engineer. Thomas Bryan's cousin, Matthew Bryan, is the business manager. A fifth generation of Bryans -- Thomas' son, Justin, an engineer -- also joined the business.
The number of small family-owned businesses in Western Pennsylvania is difficult to calculate, and the Small Business Administration doesn't keep statistics on family-owned firms, said Janet Heyl, a spokeswoman for the SBA in Pittsburgh.
About 72 percent of the businesses in Western Pennsylvania are family owned, said Ann Dugan, executive director of the Family Enterprise Center at the University of Pittsburgh, which provides services to family-owned firms in a 10-county area.
"All businesses start out as family businesses -- a husband and wife, or siblings and cousins. Some of those end up being publicly traded," said Dugan, whose center has served more than 1,000 clients since it was founded in 1996.
"Western Pennsylvania really has a strong history of family businesses," said Ellen Ruddock, director of the Center for Family Business at Indiana University of Pennsylvania's Eberly College of Business and Information Technology.
Some of those businesses, such as Snyder Cos. of Kittanning, are in their fourth and fifth generation of family ownership, Ruddock said.
To keep the business alive, succession planning is a must and should be reviewed early on -- and as an ongoing process, said David Dietrich, chairman of the Family Business Roundtable.
"Families struggle with the smooth-succession process. The best practice is to keep a board of directors, where they hire the most qualified person to run the business ... but retain family ownership," Dietrich said.
An example of such a struggle is the effort by the Rooney family to work out ownership of the Pittsburgh Steelers.
To successfully operate a family business, owners must make good business decisions and "really, really, really work hard," Ruddock said.
"They're very passionate about what they're doing, and putting in extra hours is absolutely necessary. An eight-hour (work) day is not even in the picture. Their businesses are 24 hours a day," Ruddock said.
Robert Levin, president of the family-owned Levin Furniture, agrees that heading the family business is an all-consuming affair.
"It's always on your mind. You're never really away from it," said Levin, whose company has 750 employees working in six stores in Western Pennsylvania, six in Ohio, as well as an office and warehouse in South Huntingdon, Westmoreland County.
"People have to know that you are around, and you have to give them a reason to shop with you," said Levin, 52, who grew up in the family business that has grown to annual sales of about $145 million. His grandfather, Samuel, started the business in Mt. Pleasant in the 1920s.
Family businesses face competitive struggles like all other businesses, Ruddock said, and are not immune to changes in the marketplace that can make it hard to survive.
A longtime family-owned business, King Garden Palace & Nursery in Unity, is closing its retail operation Sunday. That part of the business offers little prospect for growth, said Ronald King, one of the owners of the business founded by his grandfather, David, about 60 years ago.
The retail business supplied plants and trees and the tools of the gardening trade, as well as popular nostalgic Christmas toys, model trains, decorations and decorated trees. King's wholesale business, which sells plants and supplies to landscapers and King's own landscaping business, will remain open.
"There's very slow growth to no growth, and the overhead is getting higher. It's hard to compete against the big-box stores," King said, noting that national chains can offer cheaper prices for trees, shrubs, flowers and tools.
"A lot of people don't support their local businesses," even though those businesses often can offer the type of expert advice that can't be found at the big-box stores, said King, 35. Customers are so "price-driven" that they miss the bigger picture of supporting a local business, he said.
About 15 employees will be affected by the closing.
"It makes me sad," said Ricky King, Ronald's mother, recalling that her three children -- Raymond, Renee and Ronald -- helped in the family business as youngsters.
No comments:
Post a Comment