Keeping Family Business Working Well: Communication Is Key

By MARIA SCANDALE | Apr 11, 2018
Courtesy of: Southern Ocean County Chamber of Commerce

“The importance of communication in family-owned businesses” was a topic that sparked communication on its own at a workshop hosted by the Southern Ocean County Chamber of Commerce. Stockton University professor John Boyle led the discussion, focused on “best practices” that was part of a series in the chamber’s Founded in Family program on the importance of family business to the LBI regional economy.

First, Boyle quoted overall statistics that show challenges to the long-term continuation of family-owned businesses – 30 percent survive to the second generation, 12 percent to the third.

Yet, here at the shore in Southern Ocean County, success stories are found. Says the chamber, “We pride ourselves that our community is made up of independent businesses, with the majority being family-owned and operated.”

The value of communication was a theme in the March 28 forum.

In Boyle’s background as a certified public accountant, he has worked with many family business owners. He teaches managerial and financial accounting at Stockton and holds a master’s in business administration.

“The mission, vision and goals of the business should be understood and there should be a well-formed strategic plan,” he said of communication’s importance.

Also, “performance review” is a standard, even if that may be complicated by the fact that the boss-employee relationship is familial.

“The chain of command should be understood by family employees and non-family employees” was another of his talking points.

Noted Peg Reynolds, a co-owner of Reynolds Landscaping, Garden Shop & Garden Center with her husband, Mark, “If you are going to make it successful, everyone has to have the same level of what is expected. In our business, if you have the same level that ‘we are going to be the best at what we do,’ and as long as everyone in your family is on board with that, then I think it works.”

In their business, which has incorporated children and their spouses into the new services that grew from the original company, the new generation is extremely committed, she said. Boyle had shared the unfortunate opposite that nationwide, sometimes the owner’s sons or daughters feel entitled to arrive late and leave early.

Setting “boundaries” within the family was a sub-theme. Attendees of the program shared various takes on that. They said it isn’t always easy to avoid bringing work home, for instance, or sharing it at the dinner table.

“We always start dinner with ‘we’re not going to talk about work,’ said one attendee, with others laughing in agreement. “My brain never turns off,” said another.

Added Mary Finelli, second generation at JDM Andrews Inc. custom builders, “It’s a constant conversation. I think one of the troubles in trying to keep work out of the house is that an email comes through at 7 o’clock at night that’s really important or that you were waiting for.”

The percentage of family business owners retiring who have not chosen a successor is high – 47 percent. That statistic is startling considering that 40 percent of family business owners are expected to retire in 2017.

“They have to have a passion, they have to be educated, and they have to want to do it,” summarized Kathy Finelli, president of JDM Andrews.

Mary Finelli, at age 27, is one example of successful succession in progress. Father and JDM Andrews founder Don Finelli retired about two years ago, although the family does occasionally seek his input on ideas. Her mother, Kathy, is considering retirement in a couple of years. Mary, who holds a master’s degree, has taken over day-to-day operations and sales.

One conversation point was the issue of relinquishing financial and insurance matters when the founding generation has handled them for decades.

As the financial officer, “I’m trying to step out a little bit, but it’s really hard to give that position to someone outside of the family; it’s almost impossible,” Kathy Finelli noted. However, referring to Mary, “she has taken the company to another level with what she does.”

Mary Finelli, who said she is “constantly ready for the challenge” of extending the business, said one of the bigger challenges of transition today is the explosion of new technology and business software.

“Since the internet blew up, one thing that has made all small business more challenging is that there are so many new products constantly coming out and being advertised to clients. When they come to you, they are expecting you to know everything there is to know in the United States,” she said, to laughter of agreement. “I try to stay up to date because I am the front line of sales.”

“Just keeping up with Instagram” and other social media “is such a part of business today,” agreed Peg Reynolds. She added, “We have 700 to 800 accounts for maintenance and an office full of girls, but the world today is so fast.”

Mary Finelli surmised that changing business practices may be one reason the statistic is so low of businesses continuing into the next generation.

“When they started the company 30 years ago, there was a way of doing business, and the way of doing business has changed since then. But to make that transition and to get everybody in the office on board with those changes, it’s a lot.”

Mark Reynolds noted, “You start a company and it changes as the years go on, so your job description changes. ... You have to be extremely flexible to adapt to all the changes in the business.”

Theresa Strunk of Brant Beach-based Strunk Architecture spoke of the husband-wife partnership in business. When she came on board in the home office as the business grew, the couple learned the best ways to adapt to the sharing of business procedures.

Sometimes one spouse does their best work at different times of day as the other. The business founder may have been accustomed to Excel spreadsheets while the spouse joining the company prefers Quickbooks. A balance can be found, said Strunk, who has a degree in psychology.

“If certain ways of doing things brings out their best work, that’s how you should do it.”

“Our chamber recognizes the nurturing that each generation builds for the next,” said chamber CEO Lori Pepenella in a summary of Founded in Family, saying “the legacies contribute to what makes our region feel like home to all.”

mariascandale@thesandpaper.net

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