Here’s a statistic with pop: 90 percent of American businesses are family owned. When most people think business, companies like Apple, Walmart or Amazon come to mind. Yet in terms of entities, not dollars, family business dominates. On their downside, 70 percent of family businesses never get passed on to the second generation.
That family businesses dominate and terminate so frequently raises the question, what does it take for a family business to succeed? Having grown up in a family business — specifically a corner kosher grocery that thankfully did not get passed on — I understand some of the challenges of sustaining a family business, which include:
—Keeping a divided wall: When our job and our home become enmeshed, life can get complicated and tiresome.
—Who is on what base: Running a family business means wearing many hats. You do what it takes to get the job done. Carving out roles that match someone’s strengths — in business vernacular, “role clarity” — is not always an option.
—Reinvention: Like the song “Tradition” in “Fiddler on the Roof,” we’re emotionally connected to the status quo, particularly in family businesses. At Utica Grocery, my mother ushered in new suppliers, which my dad translated to mean more inventory, higher risk. About that divided wall …
—Keeping the “fun factor”: While work is a four-letter word, we value keeping our waking hours enjoyable. Anxiety and economic security can challenge the “fun factor” in a family business.
Still, family businesses can thrive and do it right as the following stories illustrate.
The Paint Bar
Nine years ago, Jill Kerner Schon and her daughter Jackie started a new category of entertainment by introducing The Paint Bar, an establishment that combined instructor-led painting with the pleasure of drink. They believed that with a little help, we could discover our inner Picasso and have fun in the process.
Soon after launch, The Paint Bar was booked with upward of 40 attendees per evening. Loyalists emerged with fully punched frequent customer cards. Capacity became a problem until The Paint Bar expanded to a tony downtown location. Press coverage and awards followed.
All was good until The Paint Bar hit a speed bump. New entrants emerged with a lower-priced model, using neighborhood bars as their venue. The pubs gained new customers, and the competition paid no rent. This translated to The Paint Bar experiencing lower attendance and lower pricing.
A remake was needed that took advantage of the shared economy and Jackie and Jill’s particular strengths. They kept their original suburban studio but terminated their pricey lease, shifting to places like WeWork for corporate events. With dramatically reduced expenses, they began investing in new offerings.
Jill parlayed her previous experiences in blue chip companies to bring innovative team building activities to the corporate market. Jackie, a gifted artist and new mom, targeted the children’s market — kids’ camp and birthday parties — where frazzled parents value a safe and fun environment to send their children. Maybe your child wants to see a live unicorn? No problem. Jackie surprised campers recently when she wore a blow-up unicorn outfit, and then, as a skilled marketer, she posted the video on social media.
Nine years later, The Paint Bar has reinvented itself in ways neither founder could have imagined. As they paint their future, the colors will be bold, bright and full of energy.
When Mara and Jeff DeBonee began their sandwich shop 27 years ago, they had no idea what their venture would mean to family and customers. Jeff was a recent college graduate, majoring in English and economics, when a friend asked him to partner up and run an eatery.
In the decades that passed, Jeff and Mara built a steady base, raised three daughters who also worked behind the counter, and adapted to a changing world. “I recall when we could just call out customer orders to the kitchen. Next, we were writing orders on napkins, and now we have a (point of sale) system,” Mara said.
Those aren’t the only changes. The popular food chain, Panera, has moved in. There was anxiety until they realized their customers still preferred Sandwich Works. “It’s about offering a well-balanced sandwich, with just the right amount between the bread,” Jeff said. Other changes included adding more vegetarian options, and working with UberEats to sell hot dogs and grilled cheese sandwiches.
What’s also important is what hasn’t changed. Jeff and Mara have a relentless need to please customers, and that loyalty has been repaid. Jeff recalls how one patron couldn’t convince her upscale friends to visit Sandwich Works, so she agreed to dine at their preferred location with Sandwich Works tuna in hand. Now in her 90s, this patron has her grandchildren bringing her the tuna.
From almost three decades of service, Jeff and Mara have seen it all — from employees, to customers, to street-side antics — like the naked man carrying a briefcase. “Maybe we’ll write a book,” Jeff muses. In the meantime, they are full of gratitude and staying power.
We learn from these stories about the secret sauce for sustaining a family business. Accepting change, creating joy, and respecting the relationship are key ingredients. At Utica Grocery, my family shared a ceremonial walk through the aisles after the tumult of Passover where we said in unison, “Let us be strong, let us be strong, let us be strong together.” Joy can be simple.