I Found Out What It Takes for a Family Business to Thrive

Some of the largest, oldest, most successful companies in our country were founded by families.

The Snickers and Milky Way bars we pick up at the convenience store are produced by the Mars family — the second-wealthiest in America.

Other major companies that started out as family-owned enterprises (they may be public companies now, but their founding families often still play a major role in running them): The Amos family gave us those commercials featuring the Aflac duck. Enjoy Tyson Popcorn Chicken Bites? Thank the Tyson family. Drive a Ford vehicle? Shop at Walmart? They were started by the Ford and Walton families, respectively.

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This article is written by attorney and consumer advocate Dennis Beaver, who has a passion for helping small businesses and their employees overcome issues that impede success and happiness.

One family-owned business that my readers in the Southern states have likely heard of — Community Coffee, based in Baton Rouge, La. (More on that later.)

Ninety-seven percent of all U.S. farms are family-owned, and they face the same challenges as any closely held company. No family enterprise wants to end up like Sears or Blockbuster or deal with the nastiness and infighting portrayed on the HBO drama Succession. But that was “Rudy’s” fear.

'I'm worried about our survival'

In a lengthy phone call, Rudy explained, “We are third-generation farmers in the California Central Valley, and I am worried about our survival. Coming into the office used to be the high point of my day, but it hasn’t been like that for a long time.

“No one seems able to have a normal conversation. We used to have a close relationship with our employees, and I keep telling everyone that we are headed in the wrong direction.

“Do you know of something we can read that may help us develop a strategy moving forward? Have you had personal contact with a multigenerational business, and if so, what are they doing right?”

To answer the first part of Rudy’s question, I would recommend reading the recently published The Enduring Enterprise: How Family Businesses Thrive in Turbulent Conditions. This book is right on point and a real lifeline for any family-owned business.

It’s a prescription for dealing with challenges that are unique in today’s business environment. While it was published in late 2024, much of the content has become even more relevant to the topsy-turvy financial challenges facing our country today.

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I had the pleasure of interviewing the authors, Devin DeCiantis and Ivan Lansberg, who stressed the importance of strong relationships — both internally and with your customers, suppliers and the communities you serve.

They use case studies in their book to examine the challenges that are of particular relevance to the generations that will follow. Their work is well-researched, accessible and focused on keeping family-owned businesses healthy.

Community Coffee, where relationships matter

To answer the second part of Rudy’s question, about a multigenerational company that’s doing everything right, I turned to Matt Saurage, chairman of Community Coffee.

Years earlier, his father, Norman, was a guest on my Saturday morning AM talk radio show, and I never forgot his message to my audience: “Take good care of your employees, customers, community and each other. In so doing, you will be able to weather any storm.”

I asked Matt, “What leads a family-owned enterprise to fail, and how has Community Coffee survived for over a century?”

“Dennis, you must never forget that a company is its people, and so your ability to communicate and earn trust is one of the keys to not failing,” he said. “Generally, it isn’t running out of money that leads to failure. Rather, it is because owners or leadership have lost touch with the central element of their business, which is their people.”

Infighting and distractions are real

If you’ve watched the TV show Succession, most likely you wonder if it reflects real-world issues that just about any family-owned business can face, such as infighting and distractions. What did Saurage have to say about that?

“When family issues become a distraction for the business, this is a major challenge,” he said. “Competition between siblings, for example, may seem adolescent but can be counterproductive when there are family members who do not fully understand the business or the role of family working in the business. These times demand vision, good listening skills and being fully transparent.”

He also noted that everyone needs to be on the same page when it comes to the family business.

“Caring about the business is so important,” he said. “Everyone needs to know and understand the business philosophy. Add to that a guiding principle of what the family is trying to achieve — for example, income or that the family’s priority is to see the company remaining private for generations.”

Keep the business going

Saurage offered several recommendations for keeping a family business going, whether family members are employed by the business or not.

“Avoid excessive debt or leverage,” he emphasized, “as too much of either can be a threat to survival. Moreover, all family owners are stewards of the business and can add great value without being employed by the company. Competent, talented people are needed to work here based on their merit and values, and this equally applies to family members.”

How might a family-owned business develop a sense of family in the business? “Get your children involved at an early age,” Saurage noted. “Allow them to observe and learn about the people who make the company what it is. Instill in them the joy they will experience taking charge one day.”

To read more about how multiple generations can contribute to a family-owned business, check out the article To Buck the Third-Generation Curse, Focus on the Family Story, which uses the Lawrence Welk family as a great example.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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