Family-owned businesses deal with many of
the same issues that other companies do, but adding “family
relationships” to the mix puts a twist on how ownership, management
and growth are handled. While concerns about cash flow and capital,
market share and customer service are on the minds of all companies
today, family businesses also must make room on their agenda to develop
strategies for maintaining family harmony and making sure family
relationships contribute to the success of the operation.
The distinct differences between family and non-family companies are
apparent when looking at a list of the issues each perceives as the most
pressing. In a recent survey conducted by the Family Business Center of
Central Ohio, members were asked to identify their most crucial needs
for education and advice. Here are their top five:
While several of the topics identified above would be discussed in
companies that are not family owned, in a family business there are new
wrinkles added. Take, for example, the second topic: Developing
Leadership within a Family Firm. Yes, companies of all organizational
structures must identify and grow future leaders. In a family business,
however, the desire to make the best decision for the business can be at
odds with the need to fulfill family desires and even obligations.
Christopher Lorenz agrees. A client of Commerce National Bank, Lorenz
was named president of his family business in October. Having been
founded by his father in 1932, and eventually involving as many as four
brothers and three nephews, Lorenz Equipment Company is about as
family-centered as any business can be.
"The pressure for a family member employee comes in the form of
knowing you must prove yourself beyond the level of other employees.
Otherwise, the assumption is that you have not earned your place in the
company, but inherited it," Lorenz said. "As an employer, my
pressure comes from the absolute need to judge everyone and every
situation fairly. If I can't remain objective, I will lose good
employees from both inside the family and from outside the family."
Lorenz, and 49 other family business owners, have found information,
insight, and comfort from belonging to the Family Business Center of
Central Ohio — an organization that provides monthly, interactive
meetings and quarterly, informative seminars delivered solely from the
perspective of a family business.
Chambers of commerce, leadership organizations, and professional
associations all have a role in building camaraderie and effecting
change in business today. But organizations that bring family businesses
together and address their specialized needs have the added purpose of
fostering their long-term survival and success, especially important
when considering that more than 80% of all family businesses fail before
the third generation.
"It can be awfully lonely as head of a family business,"
Lorenz admitted. "If I didn't have other members of the Family
Business Center, and the seminars they hold, I would wonder about many
of the decisions I make."
Family businesses are the fabric of our nation’s economy. According
to a recent Center speaker, Dr. Edwin Hoover of Chicago, 85% of our
country’s businesses are family owned. Understanding the
challenges they face and the rewards they reap is consequential. For
that reason, the Center’s Third Annual Family Business Awards turned
the spotlight on companies that exemplify all that is good about
operating a family business. In November, our organization recognized
the accomplishments nine finalists and winners: Lorenz Equipment Co.,
PRO-TERRA Environmental Contracting, The Fishel Company, Focus
Logistics, Apex/M&P Construction LLC, Hopkins Printing, Luebbe
Hearing Services Inc., Reputation Management Associates, Ricart
Automotive, and The Murphy Company. PRO-TERRA also is owned by members
of the Lorenz family.
"I have some very good reasons for intentionally operating as a
family business," Lorenz added. "For one thing, I know the
other family members involved absolutely have the best interest of our
business in mind. There is family pride and satisfaction at stake in
making sure the company continues … and continues to thrive."
For more information about the Family Business Center of Central
Ohio, e-mail executive director Martin Graff at graffmartin@hotmail.com
or call (614) 334-8916. Annual Dues are only $350 per business, and
entitle two people from each member company to attend the seminars and
breakfast roundtables at no additional charge.
J. Richard Emens is an attorney with Chester, Willcox & Saxbe
LLP who advises family-owned businesses and Chairs the Advisory
Board of the Family Business Center of Central Ohio. Emens is also
co-author with Beatrice E. Wolper of a book entitled "Family
Business Basics: The Guide to Family Business Financial Success."
