During my long career as the Turnaround Authority, I’ve worked with many family businesses. The particular challenge of working with family members as opposed to just co-workers is that they are emotionally connected to each other, which has led to some rather, well, let’s say interesting interactions. Like the time a disgruntled son pulled a kitchen knife on his mom. Fortunately, family disputes don’t generally involve weapons. But the fact is it can be difficult to keep them running. Seventy percent either fail or are sold before the second generation and just 10 percent survive to the third. That’s a lot of companies when you consider that about 35 percent of Fortune 500 companies are family controlled. And family businesses account for 50 percent of the gross domestic product of the U.S. But many family-owned companies not only survive, they thrive.
We are familiar with many of the large, well-known family businesses that include Wal-Mart (Walton family), Mars (Mars family), News Corp. (Murdoch family) and Comcast (Roberts family). Here are a few interesting family businesses you most likely haven’t heard of, one from each of the past three centuries, that are still thriving. • Laird & Company owns the #1 liquor license distributed in the United States. Alexander Laird began producing Applejack in 1698 for his friends and neighbors. One of his descendants built the Colts Neck Inn in 1717 and sold Applejack, with the first commercial sale recorded in 1780. The company even survived Prohibition by producing brandy for medicinal purposes. Seems a lot of people were feeling poorly during those 14 years. • Rogers Funeral Home in Frankfort, Kentucky, has been helping people say goodbye to dearly departed loved ones since 1802. It is now owned by Mary Anna Rogers, whose daughter Doherty Rogers Reynolds and her husband Tim operate the home. They are the seventh generation of the Rogers family to own the business. • The Butt family still operates H.E.B. Grocery with 300 stores, primarily in Texas. Florence Butt opened the first C.C. Butt Grocery Store in Kerrville in 1906 with an investment of $60. Last year the company had $20 billion in revenue and was listed as #14 on Forbes list of America’s Largest Private Companies. I’d say that investment paid off. Death, alcohol and food. Maybe it helped that these businesses deal with products and services with a constant demand. So I was curious to see what the country’s oldest family-owned restaurant is, considering the high failure rate in that industry. The National Restaurant Association reports that 30 percent of new restaurants fail in the first year, with another 30 percent closing in the next two years. The distinction of the country’s oldest family-owned restaurant goes to Antoine’s Restaurant in the French Quarter of New Orleans. In 1840, Antoine Alciatore, a native of France, made his way to Louisiana where he felt at home among the French speakers there and began serving French-Creole cuisine. His son Jules ran the restaurant after his death and invented the famous Oysters Rockefeller. While the odds may seem against family businesses, many do survive into the third generation, and beyond. Of course, a business can increase its odds by hiring trusted advisors to help them navigate difficult times. In my next two posts, I’ll discuss how to find the best advisors for your business, and then how to make the most of their participation in your business.