5 Tips for Sustaining a Family Business over Multiple Generations

Eric Goldschein

Eric Goldschein

Eric Goldschein is a freelance journalist who covers entrepreneurship, small business trends, emerging technologies, culture and sports. He was previously the managing editor of SportsGrid.com, and has written for Business Insider, Trep Life, the Huffington Post and more.

You can contact him at ericgoldschein.com, or on Twitter at @ericgoldschein.
Eric Goldschein

In a world dominated by ecommerce giants like Amazon and big box stores like Wal-Mart and Target, it’s easy to overlook the importance of the family business.

But family-run businesses play a huge role in creating wealth and stability in today’s economy: According to the Conway Center for Family Business, they make up 80-90% of all firms in North America, account for 78% of new job creation, and are less likely to lay people off. Maybe it’s tough to fire your kids—or maybe something else underlies these businesses’ success.

While family businesses are one of the drivers of the U.S. economy, a multigenerational family business is harder to come by. While about a third of family businesses last into the second generation, that number drops to 12% by the third generation and just 3% by the fourth. Which is to say: It may be easy to start a family or a family business, but keeping either together is a lot of work.

Of course, there is no secret to multigenerational longevity—luck surely plays a part as does endurance. Every business that has survived from grandparent to grandchild and beyond has a different story, mission, and model. We can learn plenty from those who have made it last.

1. Wear Your History on Your Sleeve

Katy Levin is the 25-year-old general manager of the Squirrel Hill Flower Shop in Pittsburgh. Her mother, Ronna, still owns the business, which she inherited from her father, Norman. At one point, all of Ronna’s siblings were involved in the business. Today, Katy and her cousins are the ones continuing the tradition that Norman started more than six decades ago.

According to Katy, that history is front and center in the daily life of the shop, as well as in the way the shop markets and presents itself.

“We put on our business cards that we’re family-owned and operated, and that we’ve been in business for over 65 years,” says Katy Levin. “And when you come into the store, you’ll see pictures of my grandfather everywhere. Customers who come in and see me—I’m on the younger end, so they’ll ask if that’s my mother, if this was my grandfather. And a whole conversation springs from that.”

The family-owned label can differentiate your business from the faceless corporations that dominate commerce nowadays. It means even more if you actually continue that tradition through to today.

“Most of our employees are family: cousins, my mom and my dad, sometimes a few my mom’s siblings. There are only a couple of employees that aren’t family, but they’ve been with us for years,” says Levin.

That last part is important: It speaks to how family businesses are less likely to lay off employees, regardless of financial performance. Family businesses are, for the most part, loyal.

2. Mix the Old with the New

A business in 2016 shouldn’t necessarily mirror one from 1950. A lot has changed since then—take the medium through which you’re reading this article as an example. But Levin cites the unchanging nature of the business as one of the reasons for its longevity.

“The fact that the older generations are still a part of this shop, I think it helps with the older customers and even their kids who come to us and know the business,” she says. “The fact that we haven’t changed anything in 65 years has helped, since you have to please all the generations who visit the store. We’re a multigenerational business with multigenerational customers—people who have been with us since day one.”

For a flower shop, the most obvious way to mix old with new—to please young and old alike—is through different arrangement offerings. Some customers prefer more traditional arrangements (Levin describes them as looser, airier, with more greenery), while others want an ultra-modern look (tighter, with five colors of the same flower in one section, perhaps monochromatic). The shop enlists a freelance designer to arrange the modern stuff, while the family can handle the traditional arrangements.

The family also finds it second-nature to uphold the tradition of Norman’s “don’t beat around the bush” attitude when it comes to ordering.

“We’re pretty straightforward. People like that,” says Levin.

3. …But Maybe Don’t Go Too Old

Levin noted that not much has changed since her grandfather’s days. That can’t be too big of a problem, since the business is still here. But it can also be a point of contention as the world continues to undergo a technological revolution.

“We still use paper,” says Levin. “For everything. We use it for our orders, we keep paper records. I would love to have a POS [point of sale] system, but my mom always says this is how her dad did it.

“It’s kind of a pain now—but what are you going to do? The boss is the boss.”

On the other hand, since Levin officially came aboard in 2013, the shop has taken steps to modernize.

“We started doing ecommerce recently, and we let the third-party e-commerce site process our online orders, which was a big deal,” says Levin when asked what has changed. “Ecommerce has gotten more important, as has social media. But that’s really about it. Everything else stays the same.”

4. The Boss Is the Boss—and That’s Mom

As you may have noticed, Levin mentioned that “the boss is the boss,” who in this case is her mother. That sentiment speaks to one of the hardest parts of being involved in a family business.

“This is a plus and a minus of course, but it’s being with your family all the time,” says Levin with a laugh.  

And that’s not just because your family is your family, and you see them all the time anyway. It also creates a standard that the younger generation has to uphold, whether they like it or not.

“Our customers from the older generation, at least older than me, who come into the store and see me don’t even want to talk to me because they don’t think I know what I’m talking about. I have to throw out that I’m the daughter or granddaughter of Ronna or Norman, and then they’re okay with me.”

5. Keep an Eye to the Future

It’s unclear whether Norman thought his children, let alone his grandchildren, would take over the business he bought from his boss and then partner one day. But according to The Family Business Consulting Group, “family challenges are more likely than business challenges to lead to the demise of family businesses.” That idea isn’t lost on Levin.

“I see the business continuing—hopefully past me, it would be sad if it didn’t,” she says. “I have plans to keep finding the balance between the old and new, and I think that will help keep it going.”

The FBCG also noted that successful firms usually give family members the freedom to choose their involvement in the business. Levin says the flower shop wasn’t originally in her life plans—her younger sister had always seemed more interested in continuing the legacy—but she came to it after pursuing other goals.

It may be too early for Levin to steer the choices of a future generation, but it doesn’t sound like she’ll make working for the Squirrel Hill Flower Shop a requirement. To set up the business for continued success, she’ll at least make sure she leaves the door open for when family members are ready to carry on the tradition.   

***

Anyone who has spent a lot of time with their immediate and extended family knows that keeping things harmonious isn’t always easy, and that task gets magnified when business is involved. Not every family is cut out to create a multigenerational business. Those that do are likely have a strong vision of family values, goals, and traditions, not to mention a business that is in many ways timeless (a flower shop has a better shot at sustainability, than, say, a video rental store).

Only time will tell if the Squirrel Hill Flower Shop enters the esteemed “fourth generation” level of success, but if the denizens of Pittsburgh’s Murray Avenue have anything to say about it, they’ll be just fine.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Eric Goldschein

Eric Goldschein

Eric Goldschein is a freelance journalist who covers entrepreneurship, small business trends, emerging technologies, culture and sports. He was previously the managing editor of SportsGrid.com, and has written for Business Insider, Trep Life, the Huffington Post and more.

You can contact him at ericgoldschein.com, or on Twitter at @ericgoldschein.
Eric Goldschein

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