Tips for keeping your family business humming along for generations
You’ve probably read the statistics: Barely three out of 10 family businesses survive to the second generation, according to Forbes. By the time third-generation family members show up for work that number is down to one. As bleak as that might sound, your family-run retail furniture store has better odds of succeeding than a similar business not run by a team of family members.
It’s no surprise the retail furniture industry is filled with family-owned stores, and that an overwhelming number of them are successful. Retailers like HFA member David Gunn of Knight Furniture in Sherman, Texas, say that’s because a tight-knit managerial circle, and the flexibility of related—and deeply invested—employees, has helped family-run furniture stores thrive in the good times and hold on tight in the bad. “We go to work every morning knowing we’ve got each other’s backs,” says Gunn, whose son Joey helps him run the family’s two stores just north of Dallas. “We know we’re in this together, good and bad.”
A family-run furniture store also can confer a significant competitive advantage and impress big-box-weary customers, who appreciate knowing they’re dealing with someone who cares deeply, and who has the same surname that’s on the letterhead. But let’s face it, family management presents its own unique and intense challenges, from day-to-day emotional dynamics to big-picture issues such as succession planning. It’s enough to make you dread those Thanksgiving meals together.
But it doesn’t have to. We asked HFA members who work side by side with mom, dad, brother, sister, aunt, uncle, in-law—you name it. We spoke with consultants and coaches, too. Everyone shared their research, pointers, and life experiences on how to make Thanksgiving and the other 364 days less stressful and more successful.
Have healthy boundaries
Every family is unique, so every family’s boundaries will be different. Regardless, it’s important you and your family establish a way to be open and honest with each other and respectful of each other’s opinions, advises HFA member Bill Grace, owner of Grace Furniture in Marcy, N.Y. Grace is the second-generation owner of a store that was founded in 1940 by his parents, Frank and Estella Grace.
Today Grace has three family members—daughter June Grace and grandchildren Mike Antanavige and Cassie Swider—working with him in the store. There are days when family members will—gasp!—disagree on how to run things. That’s when Grace says everyone needs to pull back and assess the others’ opinions. He stresses being logical, rather than emotional, when it comes to any business issues. “Try to leave your personal arguments out of the workplace, it’s unfair to non-family employees,” Grace advises.
In a similar vein, HFA member Dianne Ray, owner of Garden City Furniture in Garden City, S.C., recommends establishing an understanding with each family member in the business that, in front of other employees, they will treat family members the same way they treat other employees.
Another aspect of creating healthy boundaries between the family business and the family means agreeing to disagree, according to HFA member Julie Isley of Boone’s Furniture and Gifts in Burlington, N.C. Boone’s was started by Isley’s grandfather, and now Isley and her husband Joel run the store, with fourth and fifth generations working for them. “You have to try and leave the business issues at the store,” she says. If issues do come up, she says the best thing is to remember that you are all working as a family to achieve the best results for everyone. “It comes down to respecting everyone’s opinions,” Julie says. “Everyone has the business’ best interest at heart, but most of the time there’s only one answer for a problem. We try to reach that by consensus, but we can’t always do that. I think we do a good job of making a decision and everyone respecting it after it’s been made.”
Irwin Danto agrees with that. Danto is one of three generations of family members working under the same roof at Danto Furniture in Detroit. His father, Charles, started the business, and his daughter Ashley now works with the two of them.
Danto says it’s easy to fall into the trap of dwelling on the weaknesses to a family member. He did just that with his daughter for years, but not any more.
“The key is finding the balance and realizing you’re not going to get everything you want from somebody,” he says. “There are some things Ashley can’t do as well as me, but there are so many more where she excels where I don’t. Find the things that a family member does well and celebrate them. Work on the other areas, but celebrate the strengths.”
One issue that frequently comes up between generations in a family-owned furniture store is staying up to date on the ever-changing technology available in the industry. Wayne Rivers, co-founder and president, Family Business Institute in Raleigh, N.C., says many older retailers adhere to the philosophy that if the technology isn’t broken, don’t fix it.
The retailers don’t always see, says Rivers, that their old system doesn’t have to be broken to be replaced.
A newer system can be much more effective. Rivers advises family businesses to figure out what they do uniquely well, and then be open to periodic reinvention when the moment calls for it.
“The pace of change is accelerating,” he says. “Technology is dramatically different today, and the family business that succeeds over the long term must purposefully decide to reinvent itself. If they cling to the status quo, they’re going to struggle.”
Make joining optional
Another key to creating a thriving family business is to ensure the family members who come to work at the business are there because they want to be. Not only should family members not be pressured to join the store, but also those who do join should add value to the company.
Joey Gunn, vice president of Knight Furniture, started working in the 105-year-old business back when he was a student in high school.
“I fell in love with this place when I was working here as a teenager,” he says. “We have a saying—this is not a family charity. Those of us in the family just don’t get to show up at the store because we can’t get employed anywhere else, we have to be valuable to the company.”
Gunn adds that if someone is at their family’s business just because their family’s last name is on the building, they aren’t there for the right reasons and might want to rethink their career path.
Isley agrees that a passion for the business is essential, which she obviously has since she and her husband bought out other family members to acquire 100 percent of the family business.
“You have to want to be part of the business and its success,” she says. “If you’re just showing up and going through the motions, the business—like anything you don’t put energy into—is going to suffer.”
Plan for succession
Another key issue for many family businesses is what happens when the founder steps aside. Rivers has found that the founder of a family business can’t be replaced by one person. “Founders are uniquely super human—you have to understand that person is going to be super hard to replace,” he explains.
Rivers says any full-time family employee who thinks they can take on more responsibility at the store, while the founder starts to transition out should know they won’t be able to handle both jobs responsibly. “The first thing you have to do is figure out what the founder does—most founders don’t actually know what they do day to day. They simply show up, work hard and everything works out in the end,” Rivers says.
In that vein, Grace recommends that any new family members that join the business have a clear understanding of their role in the company and what their responsibilities will be. He even suggests that before family members come aboard, they first gain experience working at another furniture company outside of the area, so they can bring that experience and knowledge back to benefit the family store.
Rivers says the starting point is preparing the next generation. “You need a strategy, a plan and a timeline, as well as good transparency to finances,” he says. “The next generation of the family needs to be taught what to do, when and how, and then the preceding generation needs to trust them to take over when the time comes.”
Gunn has already considered this when it comes to whether Tommy and Rider, his four-year-old twin sons, will follow in his footsteps.
“Whenever that day comes, it will be their decision,” he says. “There’s not going to be any pushing on my part for them to join.
Obviously, you hope, but, ultimately, we need what’s going to be the best thing for Knight Furniture.”
Know when you need help
Finally, if you encounter a bump in the road while you are working with family members in your family store, it’s important to know when and where to reach out for help in resolving the issue.
Rivers advises a family business that is struggling internally to seek out counseling. “Call the minister or go out and find a family therapist—but work on it,” he says. “It’s like marriage counseling. If the family business is in trouble, it’s worth saving, so you have to give yourself the tools and techniques to get you through the rough patches. If you knew what to do, you would have done it already, so go to someone that has those tools,” he says.
Every family is going to have its ups and downs, which will add complexity to a business. Rivers says it’s naïve to think you are going to be one big happy family all the time. “You are going to have rough spots, and you need to deal with them,” he says. “You know what to do when you have a bad furniture delivery—you have a plan for that—so you should have a plan for when the family gets off the rails. Know who you’re going to go to and what you’re going to do.”
Ray has found the input of a good accountant and attorney invaluable in running the business, which has always been in her family, and which she now shares responsibility for with her son. Her parting wisdom is, perhaps, the most important thing to concentrate on: “Always remember—family comes first.”