Family Business Blog Archive

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Web Site or Web Business?

Ken Evoy is the genius behind Site Build It (SBI). We think SBI is the best program available to develop a web site AND to create a web-based business.

SBI is inexpensive and easy to use. Most importantly, it offers a “one stop shop” that can meet all of your needs. In stead of having to cobble together different programs to accommodate different functions, SBI does it all.

One of the strategy questions posed by Evoy, “Why build a web site when it is just as easy to build a web business”? If you start considering your web site as a profit center for your family business, you are more likely to develop a more successful web site – something so much more than just creating an electronic brochure.

Another Evoy observation is that great content trumps all of the flashy bells and whistles some web site builders think will generate high search engine rankings and a lot of visitor traffic. Building on good content and understanding how to optimize your site for the search engines makes a world of difference in being “found” amongst all of the other like-sounding competitors on the Internet. For example, if your family business makes baby carriages and you Google the term “baby carriages”, your web site objective should be the number one slot – or at least on the first page of the search results. If that is not happening, don’t expect your web site to generate any business.

What is important to understand, so many family businesses are niche market experts. The successful business practices and experience gained over the years can quickly be purposed as content for their web site/business. It is a natural fit – an opportunity to be developed as a marketing platform for their business, products and services.

To gain a better understanding of how e-commerce can help your family business develop new revenue streams and to increase revenues, we offer 11 Tips That Help Your Web Site Sell. While there, you can download a complimentary e-book on developing a web business, just click on the link at the bottom of this Blog.

Business Valuations: How Long Should It Take To Value A Business?

To learn how business valuations can help you grow your family’s business and increase shareholder value, click on the link to our web site www.family-business-experts.com

Family Feud - Link Snacks v Jay Link

Regan Kohler, a reporter with the Washburn County Register in Shell Lake, WI, provides an update on the Link Snacks family feud.

After chief executive John E. “Jack” Link fired his older son in mid-2005, Jay allegedly disrupted supplier agreements with International Food Co. and Brazil-based Friboi, a meat company.

The company, based in Minong Wisconsin, put University of Wisconsin marketing professor John R. Nevin on the witness stand on Monday, June 16. Nevin heads two nationally recognized research centers at the UW-Madison campus, the Grainger Center for Supply Chain Management and Center for Brand and Product Management.

Nevin estimated the damage to Link Snacks’ supply relationship with International Food at more than $5 million; and with Friboi at more than $25 million damage - damage to the company from alleged interference in its supplier relationships by a family member-shareholder after his termination as a senior executive. Appraisals by the company in 2006 set the value of Link Snacks and other family business assets at about $450 million, a figure the defense has disputed.

Jay Link is the defendant and counterclaim plaintiff in Link Snacks Inc. v. Jay Link, a family legal battle for control of the company, which is one of the largest U.S. manufacturers and distributors of beef jerky products.

In the jury trial that began May 27, Link Snacks, Jack and his younger son Troy Link — also a senior executive and shareholder — are attempting to enforce a buy-sell agreement that Jay signed in 1995. Jay continued as a shareholder after his termination, and his father and younger brother argue he violated his fiduciary duty to do no harm to the company. Jay counters their only offer for his one-third interest in the business — $34.6 million — was grossly inadequate.

He maintains it prevented his exit as an owner following his termination as he was building his own competing firm, also based in Minong, Wisconsin, Jerky Snack Brands. Jay is seeking $150 million less his share of the company’s debt. He’s also asked that a settlement include his right to buy out his brother and father if they do not fulfill terms of a court-ordered purchase.

The 12-member jury also viewed video depositions this week by investment bankers who dealt with Jay after he left Link Snacks. Those bankers described the transactions in which they participated with Jay Link and other meat companies that he sought to buy as he built his own company. One said he did not know Link Snacks and Jay Link had become separate entities; another said he understood the possibility that Jay would compete with Link Snacks.

Want to fix or avoid problems in your family business? Family Business Experts offers hundreds of great tips, proven strategies and solutions to improve your family-owned business. Learn how to grow your family business and maintain healthy family relationships by clicking to our web site www.family-business-experts.com

10 Signs of a Dysfunctional Workplace

Do you ever have the feeling you are working in a “mission impossible” job environment? HR expert Susan Williams suggests you could be working in a dysfunctional workplace if… 1. Nothing can get done without the boss's approval. Empower your organization by delegating. There's not much CEO work going on if the boss has to sign off on every little thing. And there's a corollary... 1a. To get things done, you have to hide them from the boss. Now you know you've got a situation that is going to end badly.

2. Who is the boss? The structure may be clear on paper, but no one knows who really makes the decisions. Everybody benefits from clarifying decision-making responsibilities.

3. Do-nothing meetings. If a meeting has no agenda or just rehashes previous discussions, axe it. And again, a corollary:

3a. IMing during meetings. Meetings are for brainstorming and discussing, not snarky IM conversations. "Pull the plug" on cell phones.

4. Cubicle co-workers IM instead of talking. Some topics require face-to-face discussion. Arrange some meetings (but don't forget rule number 3.)

5. There's more than one "secret couple" around. They usually don't stay secret for long, and tension and drama (and lawsuits) result if there is perceived favoritism. Write a policy and enforce it.

6. IT rules are so tight that you're not told your own password. Tech security is important, but there are limits. Find a reasonable middle ground.

7. There's a "wall of shame" where employee mess-ups are posted and highlighted for the entire world to see. Rewards should be public, but chastisement should be private.

8. The boss screams at staffers, for example, when there's skim milk instead of half-and-half for the coffee. Authority should never be used to bully or intimidate. Counsel or call in the consultants.

9. Everyone has 10 weeks of accumulated vacation because no one can take a day off. People are not machines. Encourage them to take vacations, or they are likely to walk out one day and not come back.

10. What matters is not what you get done, but how many hours you are seen working. Don't be impressed by the person who arrives early and leaves late just for show. Reward productivity, not hours.

When trying to identify and sort out why your organization is dysfunctional, consider doing a SWOT Analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It is simple to do, requires no special training and SWOT is a highly effective management tool. It can be done by an individual or by a work team.

To learn more about SWOT Analysis, click on the link http://www.family-business-experts.com/swot-analysis.html

SHRM Survey – Employers Add Benefits to Help Employees with Rising Gas Costs

More employers are offering telecommuting, flexible schedules, and other benefits to help employees offset the costs of rising gas prices, but few employers are increasing pay to help employees, according to a survey by the Society for Human Resource Management.

The survey found that only 2 percent of respondents said they offered a cost of living raise prompted by gas prices, or stipends to employees with long commutes.

Instead, employers are offering new benefits, and more employees are taking advantage of benefits they already had. The survey found that the most common tactic (42 percent, up from 13 percent in 2007) by employers was to raise the mileage reimbursement to the IRS maximum.

Other benefits include offering a flexible work schedule (26 percent), telecommuting (18 percent), public transportation discounts (14 percent), and rewarding employee performance with a gas card (14 percent).

"Rising gas prices are cutting into everyone's personal budgets, so employees are taking a closer look at benefits such as compressed work weeks and public transportation discounts to reduce their costs," said Susan R. Meisinger, president and CEO of SHRM. "In addition, employers are offering extra help as a tool to retain employees and improve employee morale."

The survey found that 12 percent of employers help employees organize carpools, and 7 percent offer priority parking to employees who carpool. One percent of respondents said they offer a monetary incentive for employees to buy hybrid cars.

The gas crisis helps to underscore the need for family businesses to be able to innovate and understand change management dynamics. Professor Ken Mackenzie, one of the worlds’s leading experts on Leadership and Organizational Strategy suggests that the success of a business in today’s competitive market rests with how quickly an organization can adapt to change.

We think Mackenzie’s book The Practitioner’s Guide to Organizing an Organization (PGOO) is the best book available on Leadership and Organization. To learn how to better organize your organization, click on the link at the bottom of this Blog http://www.family-business-experts.com/PGOOsp.html

COMPLIANCE UPDATE – DHS INCREASES FINES FOR I-9 VIOLATIONS AND RE-ISSUES NO-MATCH REGULATIONS

The federal government has continued its push to increase enforcement of workplace immigration laws.

The Department of Homeland Security (DHS) issued a Supplemental Proposed Rulemaking on March 24 in an effort to address potential procedural defects in its No-Match regulation.

While the No-Match rule is not yet in effect, DHS demonstrated its resolve to see that the rule is implemented and thereby effectively require employers to follow a specific protocol to resolve Social Security mismatches or face potential liability for "knowingly" employing unauthorized aliens.

The amount of potential employer liability increased as the Department of Justice raised fines for this and other I-9 violations by an average of 25% in a new rule that took effect on March 27.

Risk management is a crucial concern for every family business. A risk assessment could save time and money. To learn more about risk management, check our web site www.family-business-experts.com

Hiding in Plain Sight

Many family-owned businesses do not optimize the full potential of their business because they “hide in plain sight”. Often they are businesses that have been around for a long time and fail to understand, to paraphrase Seth Godin, that the “enemy is obscurity”.

Generally speaking, family businesses tend to develop in a niche market. These family business entrepreneurs have experience in management positions and they have degrees and/or experience in engineering, sales or finance. These family business founders share some common traits. They are hard-working, highly-motivated entrepreneurs - people with a vision.

But early on, the strategy for many family business start-ups is to maintain a very low profile – not wanting to draw attention from potential competitors to the business they are developing. These start-up family businesses are operating on a shoe-string budget. The fear is that they could easily have their business concept snatched and exploited by larger-sized firms with deep pockets.

Why do so many family businesses lack a coherent communication strategy? Mostly it is part of the family business start-up mentality that is so ingrained it becomes part of the business model – even when the lack of a strong communication strategy is hurting the growth and profitability of the business.

Based on our experience, we find that in many family businesses, marketing and business development are often bundled together with sales. As for public relations, well, that is service only big businesses can afford.

When family businesses brain storm, an interesting question for discussion is “What is our communication strategy?” When we facilitate a brainstorming session on communication strategies for our family business clients, we generally work on the premise that there are three main channels of business communications - external, internal and cross channel.

External channels of business communication include public relations, marketing, press releases, web-related strategies and publishing books and articles.

Internal channels of business communication include employee newsletters, employee handbooks, management handbooks, human resources forms, pre-employment checks, organizational guides, employee satisfaction surveys, team building, business valuation, project management, and swot analysis.

Cross channel business communication includes web sites, customer relationship management, telecommunications, vision and mission statements, family business history books, corporate governance, family foundations and business plans.

To learn more about the channels of business communication and to help develop a communication strategy for your family business, click on the link at the bottom of this Blog.

Reducing Estate Taxes

Only about 30% of family businesses successfully transition to the second generation and only about 12% successfully transition to the third generation of family ownership.

Estate taxes are a major culprit. Families build businesses and then they get clobbered by estate taxes. The federal estate tax rate is 45%!

Financial experts explain that estate tax return audits are more common than tax audits. It is reported that the IRS does an audit review on more than 50% of estate tax returns over $5 million.

For many family business owners, the business represents the major asset in the estate. Two key strategies used to defend against the devastating estate taxes – expertise in financial planning and having a current business valuation done by a competent business valuation expert.

The IRS can and will value the business when an owner dies. If the IRS audit values the business comes in higher than the one claimed by the estate, it exposes the estate not only to higher taxes – but penalties that can range from 20-75%.

In one recent case, the grandson of the founder died. The estate valued his shares in the family business at $47 million. The IRS countered with their audit and the valuation done by the IRS valued the shares at $144 million. The IRS then demanded another $54 million in estate tax and tacked on an $11 million dollar penalty. As part of our succession management process, we urge our family business clients to have their business valued every 2-3 years. The valuation is crucial to smart estate planning. It can also be used as a benchmark for compensation planning for family members and key non-family members of the management team. The business valuation can also be used as part of the strategic planning for the family; to update buy-sell agreements; and to determine the market value of a business that will be bought or sold.

To learn more about using a business valuation as a business building tool, click on our web site www.family-business-experts.com

Common Traits of Great Smaller Companies

The Wall Street Journal recently teamed with a nonprofit organization to learn more about the secrets of successful smaller-sized businesses. 15 winning businesses were selected from a pool of 850 small businesses. The winning companies share some common traits:

Clear values and a sense of mission and vision that permeates the culture

Values that extend beyond the workplace and impact the larger society

Honest and transparent communication that creates trust, enhances commitment, and encourages innovation

Extraordinary focus on the customer and on building long-term relationships

Strong sense of community

Long view with a focus on sustainability

An understanding that their competitiveness is tied to the talents and commitment of their workforce

Belief that most of their future leaders are already working for the company

Constant hunt for new ways to improve employee experience

Structure around teamwork, minimizing hierarchy, and maximizing goal achievement

Let employees at all levels make key decisions

Offer generous traditional and untraditional benefits

Create a family-like atmosphere

Share a sizable slice of their profits with employees

The result, according to the Wall Street Journal, is that employees act more like owners, committed to the long-term success of the company.

Successful businesses also share another common trait – they are better at organizing their business and that makes them more efficient, more effective and more profitable. Simply put, there is less chaos!

For business leaders interested in building a better business, we recommend Chaos Busters – A Management Guide. It is a simple guide that poses 160 key business questions – and you determine if that particular question has relevancy to making your business more successful. To learn more about Chaos Busters, click on the link at the bottom of this Blog.

Project Management Tools: Project KickStart versus Microsoft Project

Over the past few years, most businesses have been downsizing – doing more with fewer people.

Project Management is an important process for gathering information, sorting data and coordinating the timely management of resources. How well the management team manages projects, large and small, will determine the overall effectiveness of the business.

For many family businesses, projects that can help systemize the management of the business, projects that can help improve the growth and profitably of the business - often languish on the “back burner” because key managers are spending their time fighting fires, caused by the lack of planning and organization. In other words, the formalizing of the business management practices. Project management tools are extremely helpful in changing this “Catch 22” situation.

In the past few years there have been some major improvements in project management software. The software has become much easier to learn and to master – and they have become more effective tools.

David Jones, our web master and an experienced project manager, conducted a comparison study between two of the more popular project management software programs – Microsoft Project and Project KickStart.

David reached some interesting conclusions in doing the comparative study. To learn more, click on the link at the bottom of this Blog - http://www.family-business-experts.com/project-kickstart.html

Building a Better Billboard & Building a Better Business

Keeler Iron Works is a second generation family-owned business based in Memphis. George and Louise Keeler began the business in 1961 and now the business is owned and managed by their three sons, Clay (President), Rob (VP-Treasurer) and Will (VP-Secretary).

The primary work of the business in the early years was ornamental iron. In the 70’s they started building other kinds of structures such as score boards and billboards. Last year sales were about $12 M and the company has around 50 employees.

The succession process was driven by the financial planning done by George Keeler. Each year shares of the business were given to his sons up until his death in 2000. Will the business pass to a third generation of family owners? According to Rob, it is too soon to tell as the “Nexters” are still small children.

Rob Keeler stressed that the family understands the importance of communications amongst the family. They conduct family business meetings to ensure that all of the family members are kept informed.

Building a consensus in a family owned and managed business is critical to growing the business and maintaining healthy family relationships. For many business families, building and maintaining a consensus amongst the family is given very little thought – consensus is considered to be a given since the family business owners share common business goals and objectives.

However, we find that many family members in business together will differ on whether or not the business is considered a “family first business” or a “business first family”. That difference can dramatically impact the effectiveness of the business in reaching its true potential.

It is important for family members to realize that the strategic planning for the business should be driven by the strategic planning for the family. To gain a better understanding of this concept, click on our web site www.family-business-experts.com

Jack Welch Voices Concerns about Family Businesses

Recently Jack Welch was asked to look into his crystal ball when a Business Week reader posed this question – “What are the big concerns confronting business in the next 10 years”?

His first concern was the future of family-run businesses; the second was the dearth of management talent in developing nations; the third concern was corruption in the developing nations – the "payoff culture" that's the norm in too many parts of the developing world.

His two primary concerns about family business is the tension between wealth preservation over wealth accumulation. He suggest that in days gone by, wealth preservation was an okay strategy - but in a global environment, risk taking is required for the family business to grow and to survive.

Secondly, as senior family executives live longer, longevity is becoming more of a factor in succession management. The next generation does not want to wait in the wings until they are in their 50’s before they don the mantle of leadership.

Our experience supports Welch’s crystal ball gazing, certainly as it pertains to family businesses. Over the past 12 years we have been urging our clients to be more focused in their understanding of how a foreign-based business can wreck the future of family business in American by stealing market share through better quality products, better customer service and more attractive pricing.

Our Family Business Innovation Program is a dynamic process designed to help family businesses become future-focused in how they are organized. Successful family businesses need to understand and mandate the changes required to be operating in an evermore competitive business environment, where the pace of doing business is increasing exponentially.

To learn more about our Family Business Innovation Program, click on our web site www.family-business-experts.com

“Branding” Impacts Business and Community

This week, the Wm. Wrigley Jr. Co. announced its sale to Mars, Inc.

Chicago-based Wrigley has been a Chicago business icon for 106 years. Sales last year were $5 billion and the company has over 15,000 employees. A publicly traded company since 1923, the current chairman, Bill Wrigley, is the great-grandson of the founder.

In the story announcing the merger, a professor from Northwestern University made an interesting observation. "It doesn't mean Chicago has lost a lot from the job or investment side," said Tim Calkins, a professor at Northwestern who has worked as an image consultant for the city.

"The loss is from the perception side. When you lose a headquarters, especially one as well known as Wrigley, it weakens Chicago's brand."

It caused me to think about how a city’s “branding” or image is defined by the companies that are headquartered in that city. In Atlanta, we have quite a few company headquarters, Coca-Cola, Delta Airlines, Georgia Pacific to name a few – and of course the Family Business Institute!

Family-owned businesses create significance in many cities and towns across the country – a symbiotic relationship that benefits both the government and the business.

The opportunities for family businesses to create a successful branding strategy are numerous and do not have to be expensive. One idea is to consider the many other organizational entities that interface with the family’s business. They can be other merchants, banks, customers and vendors that find mutual benefit in forming a strategic partnership dealing with communications. The local Chamber of Commerce is another great communication platform as are other organizations such as Rotary and the American Legion.

Family businesses have a rich tradition in supporting their community through sponsorships in youth sport programs, schools and their churches. The question that needs to be considered is how best to incorporate all of these relationships into a corporate branding strategy.

To learn more about family-owned businesses and how best to develop corporate communication strategies, click on our web site www.family-business-experts.com

Business Valuations: Are On-Site Visits Necessary in a Valuation?

Circus City

Ringling Bros Circus was founded in Baraboo Wisconsin in 1884. Located 40 miles northwest of Madison, Baraboo hosts the many visitors that come to enjoy the river rides on the Duck Boats while touring the Wisconsin Dells.

It is not surprising to understand that the Baraboo Tent and Awning company’s early work included repairing circus tents and repairing cushions from river tour boats.

Baraboo Tent & Awning, Inc. started as a one-person shop in 1926 with the main customer being the railroad. Art Thayer would haul an old Singer sewing machine into an empty railroad car filled with torn pads from between the passenger cars, repair them all the way to LaCrosse and finally, jump on the next train back to Baraboo. In 1976 the Anchor family, consisting of Stacy and Agnes Anchor and their six children and spouses purchased Baraboo Tent & Awning. Clyde Moon, an Anchor spouse, quit his job as an asphalt plant manager to manage the new venture. The growth emphasis was placed on custom work including commercial awnings, industrial sewing, and custom design. In 1984, Clyde and his wife Carolyn purchased the company from the other members of the Anchor family.

Consolidating ownership in a small-medium sized family business is a crucial strategy to running and growing the business – not to mention reducing the issues that confront a family business at succession time

In the late 70’s, the business was struggling, hard hit by the gas shortages and the credit crunch during Carter’s administration. Seeking help to do a buyout of the relatives, Clyde visited the banks in three counties – his business plan rejected by all of them. They finally were able finance the buyout by mortgaging their farm and a loan from an aunt. Fair value for the inventory and the equipment was determined and the buyout was successfully completed. Family relationships were solid then, and remain so today.

For family businesses with similar banking experiences (banks unwilling to see the entrepreneurs “vision”), Clyde reports the pendulum has swung. Now days, the banks come calling on Clyde and his wife. No need to explain how good that makes the family feel!

The Moon’s son, Andy, came into the business in the mid 90’s – and thanks to the buyout of the relatives in 1984, the transition of the business to the next generation of ownership will be greatly simplified. The important thing to understand is that the foundation for today’s succession strategy for this family business, was laid nearly 25 years ago.

In context, family business succession should be seen as a process, not an event. Creating a successful family business legacy is the result of hard work, sweat and tears. That dream of a family business legacy drives business owners to push on where others give up. Baraboo Tent and Awning is a great example.

To learn more about succession planning and succession planning, click on the link at the bottom of this Blog.

Chaos Busters – A Great Management Tool

Chaos Busters is a very different management guide.

What makes Chaos Busters so different?

This handy management guide simply poses 160 Key Business Questions!

A management guide that contains questions rather than solutions – how different is that in this day of “one minute fixes”!

Chaos Busters has special appeal to Family Business Owners, Senior Executives, Middle Managers and Consultants & Advisors:

Family Business Owners Learning from the past without living there

Senior Executives Green and growing vs. ripe and rotting

Middle Managers Take a personal responsibility for building your self confidence

Consultants & Advisors Talking is sharing but listening is caring

Chaos Busters can be used as a “check list” to help define the strengths and weaknesses of your organization when doing SWOT analysis.

Use questions from Chaos Busters as an aid to better focus and sharpen strategic planning, organizational growth and development.

Use questions from Chaos Busters to improve team building and business innovation programs.

Use questions from Chaos Busters to unlock the potential of your people and your organization.

Use questions from Chaos Busters to better organize your organization.

To learn more about Chaos Busters – The Management Guide, click on http://www.family-business-experts.com/160KBQsp.html

Roofing Contractor Uses Green Technology

Wm. Kramer & Son, Inc. is a fourth generation roofing and sheet metal contractor located in Miamitown, Ohio. In 1907, William Kramer started a roofing and sheet metal business out of his house located in Price Hill. Primarily doing residential work, he walked with a ladder and wheelbarrow to work on various slate, tile, and tin roofs in the area.

Celebrating their centennial in 2007, Kramer & Son was named Family Business of the Year by the University of Cincinnati.

In a story about the firm published in 1927 said “Mr. Kramer has not only the experience of many years to guide him, but he adds to this that painstaking care to see that the smallest item is done right."

Stephen Kramer, current president, states "Through our strong Cincinnati West Side background, we have been taught to handle problems in an honest and straightforward manner, to value our employees and to maintain ethical business practices," Kramer said. "These guiding principles have given us numerous long-term customers and employees."

A large commercial customer noted “We call and they're here. We've always had excellent service and workmanship from Kramer. Steve or (his brother) Bruce are usually involved. It's a plus when you have the company owner working on the project."

Innovation plays a crucial role in family business longevity. Based on our experience, we know that that a Family Business Innovation program will not only help the family business grow, but will also ease the transition from one generation to the next.

At Kramer & Son, “innovation” involves “green” roofs. The roofs can be painted a light color to reflect heat. They can capture rainwater that's then available for landscape irrigation or other uses. And they can be transformed into roof gardens. "The 'green' we're mainly concerned with is actually growing things on top of buildings," Kramer said. "These rooftop gardens help solve drainage problems because water is absorbed into the growing medium, and they insulate buildings and help reduce heat buildup. They can also provide habitat for birds and butterflies."

To learn more about creating a Family Business Innovation Program for your family business, click on our web site www.family-business-experts.com

Computer Security Getting Worse

In a story published in the Atlanta Journal Constitution, statistics released last week by Symantec, a highly regarded computer security firm, suggests that risk factors to your computer are increasing.

In the second half of 2007, spam grew by 16%. According to the computer security experts, spam makes up 70% to 90% of all e-mail traffic.

The number of computers used for “phishing” web sites QUINTUPLED in the second half of 2007 from the previous year. “Phishing” are techniques/tricks to get Internet users to give up sensitive financial or personal information.

The amount of “malicious code” (computer viruses) has more than QUADRUPLED last year.

Examples of security systems breached by hackers are surfacing almost every week:

WellCare Health Plans reported that the insurance records of 71,000 families were posted on the Net for a few days.

Advanced Auto Parts announced that the financial records of 56,000 customers were tapped into.

MTV Networks said a hacker had gained access to confidential data on 5,000 employees.

ChildNet, a child protection service said a stolen lap top contained personal data from 12,000 applicants.

Mistakes add to the security problem. Texas A&M admitted to “accidentally” posting online the Social Security numbers of 3,000 students.

According to Privacy Rights Clearinghouse, more than 223 million data records of US citizens have been compromised since 2005.

If you have a breech of security in your family business computer system or your personal computer system, our security experts can help. To learn more about protecting your family business by clicking on this link to our web site www.family-business-experts.com

What Is Your Web Site Strategy?

Many family-owned businesses fail to take full advantage of their web site because they do not have a web site strategy. For many family businesses, their web site is nothing more than an electronic brochure – passive and ineffective. For some family businesses, the only reason they give for having a web site is that other businesses have a web site so they figured they needed one too – the “lemming approach” to a web site strategy!

For those who have not engaged the concept of building a “web business”, it might be interesting to know that survey results from the National Retail Federation are projecting a 17% increase in online sales this year. The survey estimates that the online sales of $175 BILLION in 2007 will increase to $204 BILLION in 2008.

The numbers show how people are learning to use the Internet for information, communication and purchasing products and services.

We recommend to our family business clients to aggressively use their web sites to promote and grow their businesses. We feel that almost every family business has a product or service that can be promoted and sold on the Internet. If your products or services do not lend themselves to online sales, at least consider using your web site as a branding mechanism for your family business. The branding strategy can build sales and strategic partnerships.

For some family businesses, the opportunities to grow the business by developing online sales are so great, we feel the person developing the web site resource should be a direct report to the CEO and the web site be managed as a profit center for the business.

To learn more about using a web site to grow your family business, click on our web site, www.family-business-experts.com

Right Turns Save Money

Innovation programs are critical to the on-going success of any business.

If your family business operates a truck or delivery fleet, you might find a story interesting about an innovation program at UPS.

According to an engineer at UPS, the company re-designed its delivery routes to minimize the number of left hand turns. The idea was to reduce the amount of time that drivers waited at an intersection. Right hand turns were made more quickly and also reduced the chance for an accident re turning left across oncoming traffic.

According to UPS, changing their delivery routes to make more right hand turns produced some huge savings. UPS estimates that in 2007, the route changes reduced 30 million miles from their delivery system. The reduced mileage saved over 3 million gallons of fuel and reduced their fleet emissions by 32,000 metric tons!

One of the strengths of a family-owned business is that they have a long view - they are working on creating and protecting a legacy for the next generation. Decisions are not made on the need to meet quarterly earnings projections like a public company.

The flip side of that rational is that it is easy for a family business to get in a rut and fail to quickly adapt to changes in the market place and/or changes in technology. Only about 30% of family businesses successfully transition to the second generation and only about 12 % make it to the third generation. Failing to adapt to change is a major contributing factor to the failure of family businesses to transition from one generation to the next.

To learn more about creating an innovation program for your family business, click on the link at the bottom of this Blog.

Parenting Adult Children

One of our clients exclaimed that “nothing could be closer to ‘heaven on earth’ when you have your kids in business with you and everything is going well – and nothing is closer to ‘hell on earth’ when you have your kids in the family business and things are going badly.”

When it comes to parenting adult children, our Family Business Expert is Jane Adams, PhD. Dr. Adams is a social psychologist, author of many best selling books and a sought after speaker. She has appeared on many of the top TV news and talk shows, including the Oprah Winfrey Show.

Relationships between parents and their adult children continue to interest baby boomers, and Family Business Expert Dr. Jane Adams brings a special expertise to the topic; she was featured in USA Today on March 25 and will make an appearance on the CBS Morning Show Wednesday April 2 at 7:15 AM.

Dr Adams, a nationally recognized post parenting coach, will be discussing what she calls the new generation gap - "between parents, who came of age in economic good times, and their “20-30 somethings”, who often resent that the privileged life style they feel entitled to is inaccessible without continued financial and emotional support from their elders." According to Dr. Adams, "This resentment even colors their expectations when they join the family business - they often feel advancing in the company is their prerogative, whether or not they are capable, deserving, or willing to work as hard as they must to keep the business going and growing."

As life-stage transitions occur – kids becoming adults - parenting skills often remain static. In a family business, problematic interactions between parent and adult children present risky situations that can be harmful to the business and destroy family relationships. To learn more about avoiding the pitfalls of parenting adult children, click on the link at the bottom of this Blog.

Security Alert – Lock Bumping

Harold Copus, a former Special Agent with the FBI, is our Family Business Security Expert. Harold is a frequent guest commentator on security issues for Fox News Network and his success in finding missing children has been featured on several Dr Phil Shows.

Copus has been warning about a new, low tech security concern for homes and businesses - a special key used for “lock bumping”. Lock bumping is not new – for years it has been used by locksmiths and burglars. But now the special key used in the process is available on the Internet – for just 2-3 dollars. With this bump key, almost any tumbler lock can be “bumped” (opened) in 5 seconds or less.

ALOA (Associated Locksmiths of America) has also tried to raise the public awareness to the ease in which bump keys can be obtained on the Internet.

High security locks are much more expensive but offer increased protection against “bumping”. High security locks carry a UL437 rating. Your locks can be checked by your local locksmith. Typically high security cylinders are sold only through locksmiths and manufacturers reps – they are not sold through retail outlets.

If you have a family or business security issue that you would like to discuss with Harold Copus, click on the link at the end of this Blog.

Why Have An Advisory Board?

There are many threats your family business could be facing – and many times these threats are not apparent to the family business owner. Like some types of cancer, they remain asymptomatic until they are discovered – and then it can be too late for any effective remedial action.

An Advisory Board can help relieve tensions and resolve problems

• Continuing disagreements between family members

• Broken communication between generations

• Narrow ways of viewing things

• Emotionally charged decision making

• Problems attacked without objective perspectives

• Distorted assessments of each other’s talents

• Loss of commitment to the family and/or business

• Questioned motives

• Analysis paralysis

A family business doesn't have to be experiencing problems to benefit from an Advisory Board. There are many opportunities an Advisory Board to help the business capitalize upon:

• bring additional depth and breadth to planning for the future

• provide specific assistance in assuring the continued success of company operations

• aid in the selection and development of the next generation of owners and leaders

• help expand and diversify the business

• counsel regarding succession and retirement plans

As a family business grows and becomes more successful, the issues a family business owner must confront become more strategic than tactical. Every family business owner needs to have objective and honest input from people who do not have a self-serving agenda. An Advisory Board is a great forum for debate on corporate policy and procedures, corporate governance and the survivability of the business. An Advisory Board can also be an excellent bridging mechanism between generations – helping to create a balance between the family business owner and his/her successors.

As part of our process for developing an Advisory Board we highly recommend two books:

160 Key Business Questions - can be the basis for conducting a family business SWOT Analysis to improve communication between members of the family and executives in the business ( http://www.family-business-experts.com/160KBQsasp.html )

The Practitioner's Guide For Organizing An Organization - we think this is the best book available on Leadership and improving organizational performance ( http://www.family-business-experts.com/PGOOsp.html )

Benefits Are Numerous

• Acquisition of high powered talent and expertise not otherwise available

• Fresh, reality based, objective evaluation of needs, talents and opportunities

• Major assistance in the tough decisions about business and family that need to be made

• Significant strengthening of the business planning process

• Enhanced objective problem solving

• Mature, knowledgeable guidance for better development of a coherent, innovative strategy

• Objective assessment of actual performance of family members and key non-family personnel

Creating an Advisory Board is a major Success Strategy we recommend to our family business clients. An Advisory board can be a wonderful safety net for both the family and the business – especially if the family business owner/manager dies or is disabled.

To learn how your family business can benefit from an Advisory Board, click on the link at the bottom of this Blog.

23 States Impose Additional Estate Taxes

For many family-owned businesses, the major threat to transitioning from one generation to the next generation of family ownership - estate taxes.

While much of the public debate about estate taxes is focused on the federal estate tax, there are 23 states that impose additional estate taxes, according to a 2008 report by the Connecticut Department of Revenue.

Those states are:

Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Washington and Wisconsin.

According to the IRS, the current estate tax law allows for a $2 million, tax-free exemption, and anything over that is subject to a 45% tax. Next year, the exemption will go up to $3.5 million, and on Jan. 1, 2010, there will be no estate taxes imposed until Jan.1, 2011. In 2011, the exemption will be $1 million, and the tax rate will be 55%. After that, Congress will review the estate tax again.

Estate planning, Succession Planning and Succession Management are three crucial strategies for protecting the family business legacy.

To learn more about effective estate planning for your family business, click on the link at the bottom of this Blog.

Exemption Killer

Generally, if you dock the pay of exempt workers, you kill their exemption because you are treating them like non-exempts. You could easily owe a few years' worth of overtime, suggests HR expert Susan Williams.

According to Williams, taking of illegal deductions from exempt employee pay can change an employee's status to nonexempt, with the possibility of your owing highly paid workers up to 3 years of back overtime!

But DOL does allow docking in certain circumstances. So here are the situations that do allow an employer to dock an exempt employee's pay.

Full-day absence for personal reasons, other than sickness or disability. For example, if a person is absent for 2 full days to handle personal affairs, the employer could deduct from the salary for 2 full-day absences. However, if the exempt employee is absent for 11/2 days for personal reasons, the employer can deduct only for the 1 full-day absence.

Full day or more for sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary. Employers may also deduct full-day absences if salary replacement benefits are available through state disability insurance or under state workers' compensation laws.

Jury duty or temporary military leave. While an employer cannot make deductions from pay for absence of an exempt employee caused by jury duty, attendance as a witness, or temporary military leave, the employer can offset any amounts received as jury fees, witness fees, or military pay for a particular week against the salary due for that week, without loss of the exemption.

Infractions of major safety rules. Deductions may be made for penalties imposed in good faith for infractions of safety rules of major significance (for example, smoking in an explosives plant, oil refinery, or coal mine). Sexual harassment or violence. Deductions may be made for unpaid disciplinary suspensions of a full day or more, imposed in good faith for infractions of workplace conduct rules.

First week/last week. An employer may pay a proportionate part of an employee's full salary for the time actually worked, in the first and last week of employment.

FMLA intermittent leave. An employer is not required to pay full salary for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act (FMLA). Employers may pay a proportionate part of the full salary for time actually worked.

Whether your business is a start-up or a mature family business, one of the most important strategies to insure the success of your family’s business is having an outside advisor – someone who is not connected to the business or the family, but who understands business and family dynamics. You can learn more about having one of our family business experts as a mentor, a coach or as a member of your advisory board by clicking on the link at the bottom of this Blog.

Family Business Valuations: The Appraiser - Technician & Educator

First, they must be experts at the craft of appraisal, producing first-rate valuations that meet all the requirements imposed by law and client expectations.

Second, as most family businesses are having their companies valued for the first time, the best appraisers see themselves as educators too. It is not enough simply to provide a number representing a business’ fair market value; the appraiser should make sure the family business owner(s) understands the number, knows where it came from, and believes it to be accurate. The family business owner is not the only one interested in the outcome of a valuation. Often there are partners, key employees and family members who have a vested interest in knowing the value of the business. As an educator, your appraiser should welcome all interested parties to participate in the process. As an objective third-party, it is often easier to have the appraiser answer questions and ensure those designated by the owner also know where the value came from and believe it to be accurate. In this role, the appraiser can help ensure peaceful relations between all of the interested parties. When choosing an appraiser for your family business, look for a firm that is prepared to play both roles – expert appraiser and educator.

To gain a better understanding of the critical role family business valuations play in succession planning and the succession management process, click on our web site www.family-business-experts.com

Making Money & Doing Good

PRESERVE is the brand name of the products produced by Recycline Inc, a maker of eco-friendly consumer products located in Waltham, MA. Founded in 1996, the company produces a line of household products that range from tooth brushes and razors to tableware and kitchen products.

Eric Hudson (45) is the founder and CEO. As an entrepreneur, he wanted to find a better way to use recycled plastics and to be able to connect those products to people who made “green products” part of their product preference and buying habits. His thinking was influenced by the amount of plastic products going into landfills. Plastic takes a long time to degrade and when they do, they can produce toxins that add to our pollution problems.

Why a tooth brush as the first product – every year a billion tooth brushes are put into landfills and every year 2 billion plastic disposable razors go to land fills.

Hudson relied on his family to help launch his business. His dad is an engineer and designed the first tooth brush. His wife worked in operations. Graphic design was done by a cousin. A cousin’s wife was pictured in some of the early marketing materials. His brother facilitated retreats and investors included mom, brothers, cousins, aunts and uncles!

Not only is his company making money, they were selected from 1,000 other entrepreneurial businesses in the 2007 “Boost Your Business” contest run by Forbes Magazine. The first place prize - $100,000 dollars!

Starting a business is never easy and often chaotic. While the entrepreneur may start with a good business plan, that plan rarely considers how to order the chaos associated with running any business. Often the chaos consumes a great deal of energy and momentum. Worse yet, the entrepreneur and his/her key managers get bogged down fighting fires – and lose sight of their vision.

Chaos Busters – A Management Guide is a nifty handbook for helping businesses to order the chaos of their business. The handbook has 160 great tips and ideas for helping to professionalize and formalize the management of a business. Whether your family business is a start up or a generational family business, Chaos Busters makes a lot of sense.

To learn more about Chaos Busters, click on http://www.family-business-experts.com/chaos-busters-b.html

Improving Brainstorming Meetings

Brainstorming meetings are one technique for gathering ideas and input for innovation programs. Traditional brainstorming meetings are open meetings where ideas and concepts are “kicked around” and discussed.

An Australian business coach, M. Russell, reports that “brainwriting” improves traditional brainstorming by 40%.

Instead of talking about ideas and concepts, the participants in the meeting write down their ideas – a technique that is more inclusive because it reduces the fear/risk factor of being embarrassed or ridiculed by others.

The technique is called “Brainwriting 6-3-5”. The 6-3-5 stands for 6 people, 3 ideas per person in 5 minutes.

How it works. Create a form with 3 columns for idea 1, idea 2, and idea 3. Then create 6 rows down the page – one row for each of the six people in the group.

Each person takes a form sheet and takes 5 minutes to write out 3 ideas for solving the problem statement. Then the form is passed around the group and the process is repeated. “Seeing” the ideas that have been written down by others can/will inspire more ideas. After doing this for 30 minutes, the forms will have 108 ideas from each group of 6 people!

Innovation programs are especially crucial to the survival of family-owned businesses. For many family businesses, “being in the groove” can just as easily turn into “being in a rut”. One example is the family doing well in the buggy whip business – an industry that declined with the advent of the automobile. They missed the opportunity for change and growth because they never conceptualized themselves as being in the “transportation business”.

To read more about creating an innovation program for your family business, click on the link at the bottom of this Blog.

Commercial Diving – Five Generations Deep

Horace Thompson began his family business as a commercial diver in 1898. The business is based in Duluth MN. His son, John Thomson took over the business.

John had three daughters – and diving to repair ships, docks, and bridges – well; it was not considered something for a woman. His daughter, Marie, loved the work and was a dive tender for her dad. She worked topside to assist him and ensure he received an uninterrupted supply of air.

Marie quickly proved herself a capable and dependable partner, yet she encountered some resistance as a young woman working on the male-dominated Great Lakes waterfront of the 1950s and ’60s.

She recalls when her dad was asked to assess the damage after a vessel hit an ore dock. “We got there, and they asked us to wait. My dad went in and talked to someone, then came back. Each time, I could see him getting angrier and angrier.”

The dock superintendent said women weren’t allowed on the facility. But Marie said her frustrated father finally issued an ultimatum: “If she doesn’t come with me, I don’t work here.” After a series of calls to corporate higher-ups, Marie and her father finally were granted access and got to work.

Marie’s husband Jerry took over the family business and the name of the business was changed to PJ Norick & Sons. The knowledge of this business has been passed on from generation to generation,” Marie Norick said. “My dad learned to dive from his dad. My husband, Jerry, learned from my dad. Our boys learned it from their dad. And now our grandsons are doing the same.” When Jerry retired, son Peter took over the business.

“I get a lot of satisfaction from carrying on our family tradition and helping to keep the business going,” said Zac Norick, Jerry and Marie’s 19-year-old grandson.

Jerry Norick, age 74, finally gave up diving a few years ago. Even though he still feels physically able, he said it was time to step aside. “You’ve got to hang it up at some point. The kids won’t wait forever,” he said.

Family business succession planning and succession management is not easy – it is hard work and can be a minefield of emotionally-charged issues. To learn more about succession planning and succession management, click on our web site www.family-business-experts.com

Family Business Succession Planning Survey

The latest family business survey sponsored by Mass Mutual indicated that family businesses are optimistic about 2008. The survey had 1,000 respondents.

About 75% expected increased revenues this year. This is a very important financial indicator as family-owned businesses are the economic foundation of our country.

Succession remains the biggest issue that confronts family businesses – the instability of family and business when business families do not have a succession plan in place when the owner dies or becomes incapacitated.

Other major issues that confront family-owned businesses reported in the survey:

• Labor costs

• Health care costs

• Finding qualified employees

• Foreign competition

• Labor union demands

• Domestic competition

• Oil prices

• Availability of credit from lenders

• Estate taxes

If you are the owner of a family business and preparing to deal with succession, consider taking a few minutes to take our Family Business Succession Planning survey.

Each response is reviewed by a family business succession expert. The survey does not require submitting any financial, personal or confidential information.

To learn more about our Family Business Succession Planning survey, click on our web site www.family-business-experts.com

Managing Change for 230 Years

The St. John Milling Co dates to 1778, founded as the Dungan Mill by Jeremiah Dungan in Watauga TN. A grist mill and country store selling farming supplies, it is the oldest continuously operated business in Tennessee.

In 1886, the business was purchased by Dungan’s great nephew George Washington St John and the name of the grist mill was chanced to St John Mill. Early visitors to the business probably included Daniel Boone and Davie Crockett.

"My dad (James St. John) grew up in the mill," George St. John said. "My grandfather died in 1904, and Dad inherited the mill. I’ve grown up in it." The business is now run by his daughter and son-in-law, Elizabeth and Ron Dawson.

And his father-in-law, the man Dawson fondly refers to as Mr. George?

"Mr. George (95) works on the books and does other things around here," Dawson said. "He comes in and works on Tuesdays and Thursdays."

"I’m trying to maintain the heritage of the mill," St. John said. "I’ve had some hard work here, so it means a lot to me. I never did take many trips to the beach or anything." St. John crossed his hands and smiled. "I love my home," he said. "I love my work."

We don’t own the mill," Dawson said. "Our name is on the deed. But it belongs to this community. We are here to serve the community."

For centuries, folks have bought all sorts of feed and seed from St. John Mill. The business he loves so dearly serves people he calls friends as opposed to customers.

After college, St. John came back to the family business and he noticed the need for change. Acceptance of progress and change, he said, has proven essential to the mill’s continued success and survival. "Mr. George told me when I started here that if you don’t change to meet the needs of people, then we won’t last," Dawson said.

"I want to leave the idea that we improved things," St. John said.

Dawson embraces change much as St. John does. For example, he’s wide open to preparing to build a bridge to tourism. Last year, St. John Mill was included on the Quilt Trail, which brought several busloads of tourists to the mill to shop. And they weren’t buying feed and seed. "We need to have things that women will buy because women spend about 80 percent of a family’s money. So, we sell quilts and jams and jellies. We probably sell more gloves to women than to men.”

To learn more about change strategies for your family-owned business, click on our web site www.family-business-experts.com

Poinsettias – The Holiday Plant

Paul Ecke Ranch, a family business based in Encinitas CA, has been the dominant force in poinsettias for more than 85 years.

The poinsettia's yearly cycle of blooming during the winter, near the holiday season, gave Paul Ecke the notion that this would make an ideal official holiday flower. But the question remained: how to promote and market a plant that most people had never heard of or seen - let alone associate it with the holiday season?

In the early years the core business was producing field-grown poinsettia mother plants. These plants were harvested in the spring, and shipped in railroad box cars to greenhouse growers across the country. Paul traveled the country, promoting the plant to greenhouse growers, teaching them what he had learned and encouraging them to market the plant as a holiday flower.

In the early 60’s, Paul Jr took over the business. His major innovation was to move from a field growing operation to a greenhouse operation. He also continued the marketing efforts – using TV as an advertising strategy. Shows such as the Tonight Show used poinsettias as a set decoration during the holiday season. This constant effort paid off as today, poinsettias are as much a part of the holiday season as evergreens and carols. In fact, due to the promotional efforts of the Ecke family, by an Act of Congress, December 12 was set aside as National Poinsettia Day.

Today, Paul Ecke III (P3) is president of the family business. A major innovation has been to take the farm global. He opened greenhouses in Guatemala in 1997 to reduce the ranch's costs. Today the vast majority of the ranch's cuttings are grown in Guatemala. The greenhouses on the Ranch are now used for research breeding. According to Greenhouse Grower magazine, Paul Ecke Ranch provides cuttings for about half the poinsettias sold worldwide and about 70 percent of those produced in the United States.

However, competing in a mature market can be a real challenge. The poinsettia has become a commodity product.

"We have to figure out how to add value to products," Ecke said. "We will continue to look for acquisitions and look for capital. We're not in a growth industry right now, so the No. 1 job is to survive. But the No. 2 job is to try to grow."

Innovation should be a major family business strategy - the key to survival for generational family businesses. To learn more about how your family business can create an Innovation Program, click on our web site www.family-business-experets.com

American Dream

26 years ago, Ali Khoja and his wife Yasmeen, immigrants from Pakistan, bought a Dunkin’ Donuts store in Waukegan, IL. Working 17 hours a day, the couple made the store successful. Today, they have 21 stores – 11 in Lake County and 10 in Chicago.

Talking about the store in Waukegan, Khoja said "It has brought us good luck, and our business has been very good," he said. "This is a country of opportunities. It still is. America is the heaven on earth," he added.

Khoja (60) has turned much of the day-to-day operations over to his son Karim (33) and son-in-law Aziz Nathani (29) but still is active in the business as an advisor. "It's in good hands," said Khoja.

Karim graduated from the University of Wisconsin and Nathani graduated from DePaul University. They plan to open 9 new stores in the next two years. Currently they employ more than 350 people.

Typical of many immigrant families, they got into a business where the family could become successful by working hard, together as a family.

Nathani commented that the secret to their success was hard work, long hours and the good fortune to have the right people working for them. "When you take care of your workers, they'll take care of your business," Nathani said.

The next hurdle for this family business is dealing with the successful transition in ownership, from one generation to the next. Succession is not easy – the issues that need to be addressed are not easy. But hard work alone is not enough to make succession process successful, it requires a lot of input from experts such as estate planners, tax advisors and legal expertise.

A proven strategy is to seek out a family business expert who can facilitate the succession process. To learn more about the issues involved in succession, we invite family business owners to complete the Succession Survey on our web site – just click on the link at the bottom of this Blog.

Going Green

In our work with family-owned businesses, there is evermore evidence of how successful family businesses are embracing new strategies - Going Green.

As part of our family business innovation program, we recommend our family business clients consider Green Strategies as a way of reducing costs, the number one concern of family businesses, according to a recent study.

But Green Strategies are more than just about reducing costs – recognizing their commitment to a Green Philosophy is also becoming a more important part of their marketing and business development message.

Harbor Industries is a third generation family business headquartered in Grand Haven, MI The company was started in 1946 by Henry Parker with 7 employees. It was a fixture manufacturing business - for greeting cards.

Today it is one of the largest fixture manufacturing operations in the country with 400 employees and sales estimated at more than $68 million in sales.

At the end of last year, the business transitioned from the second generation, Ted Parker (70), to the third generation of family - son Tim Parker (36), president and Cindy Parker Euscher (44), executive vice president.

“They've both had a strong interest in the community and the company," said Ted Parker.

Both Tim and Cindy plan to continue the family’s commitment to growth and social consciousness. "I do have some big shoes to fill," Tim said. "There's definitely a strong sense of legacy."

Tim Parker was responsible for a new 300,000 square foot manufacturing facility and helps organize workplace volunteerism.

Parker Euscher has focused on sales and marketing. She has led the company’s Green Strategy to help reduce waste and energy. “We want to be the voice of sustainable business in our industry.”

To learn more about the “art of innovation” – connecting innovation and learning in your family business, click on the link at the bottom of this Blog.

The Urge to Innovate

General Manufacturing is a family business located in Bluffton, Indiana. Paul Reiff (70), president and CEO, had a successful professional career as a senior level executive for large, multi-national businesses. Paul credits his “urge to innovate” as a primary reason his business teams have always been successful.

Then the entrepreneurial bug bit in 1986. After a career building businesses, Paul and his wife decided to opt out of the corporate world and started looking for a business to buy. He found a company that started in 1962 but never grew beyond one employee and three products. The company was established in the 1960s and was the first business to offer portable fluorescent lighting to the automotive aftermarket.

Today, General Manufacturing has more than 60 employees and markets 158 products with 1,500 variations serving the automotive aftermarket and airline industries, military, industrial market and original equipment manufacturing businesses. Reiff’s son Matt is the operations manager, daughter Sarah is the controller and nephew David Reiff III is the national sales director. With 11 grandchildren, the Reiff family has a strong bench!

Reiff earned an engineering degree from Michigan State but spent most of his career in sales and marketing. With his own company, he combined his business building sales and marketing skills with his design skills. One product, the Stubby light revolutionized that product industry. One year after buying the company General Manufacturing designed and built the Stubby light — a fluorescent hand-held work light that set the standard for the industry. “When we introduced that thing, I couldn’t get off the phone,” Reiff said. Today, the company sells thousands of Stubby and Stubby II lights (safTlite). Family values are important to Reiff. “I have insisted with my kids as they come along and as they grow into the business that they maintain a strong relationship with our employees,” he said.

Many of Reiff’s employees are working moms, and he tailors his programs to meet their needs so they can be home when their children get off the bus. He also makes every effort to accommodate employees when school is closed and they have to be home with their children.

“We have very strong loyalty in our employees, but we try very hard to be a family business,” Reiff said. “I go over what I call ‘Reiff’s Rules’ with new employees. I tell them I hope you feel as strongly about your family as I do about mine.” Like many family business owners, Reiff takes great pride in seeing the employees of General Manufacturing as part of his extended family.

Does it all pay off – you bet it does. General Manufacturing, with a local payroll over $1.25 million, has been selected as the Business of the Year for Wells County IN – something that Paul Reiff finds to be a humbling experience.

Innovation is an important part of every successful family business. To learn more about innovation programs for family businesses, click on the link at the bottom of this Blog.

Jiaye Changqing - “Family Enterprise Lasts Forever"

Family-owned businesses are the foundation for the economic success and prosperity of our nation. It is estimated that over 67% of our Gross Domestic Product is derived from family businesses.

Over the past 20 years, an economic revolution has been taking place in China. As China became trading partners with the US, a new class of wealthy Chinese entrepreneurs has been created. For instance, one family business does over $50 million in annual sales selling valves and pumps to the US.

Jiaye Changqing is a week-long university course that teaches values and strategies to the sons and daughters who will be taking over the family business. One graduate of the class is Luo Yu, 31, a graduate of the class who runs his father's factory.

At first, Luo Yu didn't share the family dream. His father started the Cixi Huili Machinery & Electric Co with 30 people in 1988. The company now has 1,100 employees.

"When I graduated from university, I had plenty of my own very good ideas. I was very farsighted," said Luo, now general manager of the company.

Gradually, Luo said, he saw his father's sacrifices and understood the importance of a family business. "Why should we give away what we earn through such backbreaking effort to someone else not in the family and in poverty?" the former Jiaye Changqing student said.

“Blood is thicker than water. Most Chinese hope their legacy will live on through their children's lives and careers. Every entrepreneur dreams this," said Chen Ling, an economics professor.

While the special needs of family-owned businesses are newly discovered in China, that is not the case in the United States.

For more than 40 years, Don Schwerzler has been advising family businesses in the US and abroad. Schwerzler is the founder of the Family Business Institute and an internationally recognized expert in dealing with the unique and complex issues that confront and confuse families in business together.

“When we created our Family Business Experts web site, little did we know how strong the global interest would be in family business dynamics. Now, each month we have visitors to our web site from over a 100 different nations,” said David Jones. Jones is a partner in the Family Business Institute, the editor of the ezine Understanding Family Business and the Family Business Blog. “Complimentary subscriptions to UFB and FBB are available on our web site,” stated Jones.

To read more about the highly successful multi-disciplined approach, pioneered by Schwerzler to deal with complex family business issues, click on the link at the bottom of this Blog.

Keeping New Year Resolutions – Consider Family Business Advisory Board Strategy

Many family business owners and their families get together to celebrate the Holidays. Not “talking shop” at these family get-togethers is a real challenge. During these family times, many families in business together make promises to do a better job in the New Year regarding family relationships and family relationships within the family business.

Some of the most common issues include:

• Continuing disagreements between family members • Broken communication between generations • Narrow ways of viewing things • Emotionally charged decision making • Problems attacked without objective perspectives • Distorted assessments of each other’s talents • Loss of commitment to the family and/or business • Questioned motives • Analysis paralysis

But once the New Year gets started, most family businesses stay in the same rut as before – the issues continue to degrade the working environment and consequently, the family business never reaches it’s true potential.

Creating a Family Business Advisory Board may be the best solution to this problem.

Family Business Expert Don Schwerzler has worked as a family business advisor for over 40 years. Says Schwerzler, “If there were only on strategy I could recommend to a family business, that strategy would be to create a Family Business Advisory Board. The Family Business Advisory Board can be a wonderful safety net for both the family and the business!”

Many Family Business Advisory Boards have only one member from outside of the family and the business. But that one person can be very effective in helping to maintain healthy family relationships while at the same time helping grow the business in size and profitability.

To learn more about creating a Family Business Advisory Board for your family business, click on our web site www.family-business-experts.com

Unique Gift For Family Holiday – based on “your” family’s history and trivia

We have found the perfect holiday gift for families celebrating this Holiday Season – be it Christmas, Hanukkah, Kwanzaa or Eid.

As a pioneer in family business consulting, we understand how important family values are in influencing the decision making process for families in business together. As professional advisors to family-owned businesses, we do not think most business families take enough time to reflect on the history of the family and their business. This family trivia game underscores the importance of family values and traditions.

At this time of year adults and children are bombarded by expensive ad campaigns - toys and gadgets that are touted to be the best or the most popular Holiday gifts.

However, when surveyed about their Holiday memories, most respondents do not remember “things” but remember experiences. Action experiences such as the story telling that goes on at Holiday family reunions, the soldier coming home for the Holidays, baking cookies with grandma, the searching for and decoration of the “perfect tree”, hunting with grandpa, the making of a Holiday meal, remembering and celebrating the sacrifices made by those who came before us, and the Holiday tradition of “giving” that transcends most religions and cultures.

We recommend a family trivia game – a game that is unique. As you play the game, the answers to family trivia questions customize the game for your family’s traditions, culture and memories. As you play and record the answers to questions about your family, you are in fact creating a written record of your family’s history!

This family trivia game can be a wonderful way of introducing young people to our family memories and traditions – a celebration of our family’s values.

To learn more about this family trivia game and how to order this unique gift on-line, click on this link to our web site www.family-business-experts.com

Goat Meat – A Family Business Niche Market

Charles Seugling founded the Seugling Meat Packing Company in 1917. A third generation family business, grandsons and brothers Charles (57) and Robert (54) Seugling are partners in this slaughterhouse operation located in Pequannock, New Jersey.

Many family businesses have a niche market and for Seugling Meat Packing, it is goat meat.

Charles said sales would be record setting this year due to the confluence of Christmas and the Muslim Festival of Sacrifice (Eid al Adha) that is observed December 19 – just a few days before Christmas. This happens every 30 years or so.

EMA in Whippany NJ is another family slaughterhouse business that was started in 1989 by Ali Kucukkarca, an immigrant from Turkey. His son Edibey, facilities manager said they are processing about 2,000 head per week – four times the normal rate.

But there is more to this market – one that reflects the immigration influx into this country. For instance, in New Jersey, the Muslim population has quadrupled in the past 20 years. There are also large numbers of Greeks, Italians, Jamaicans and Hispanics. "You've got an Asian market, a Greek market, an Indian market. You've got quite an audience of people who have come to this country and want the meat they've grown up with." said an official of the state Agriculture Department.

In the United States, sales of goat meat has increased by 31% over the past 10 years. However, goat meat is still a much smaller market than beef and pork and chickens. That is one reason the goat slaughterhouses are primarily family-owned businesses.

Immigration, legal and illegal, trends are accelerating rapidly. Family-owned business should be considering how the changes in national demographics factor into their strategic planning.

To learn more about Change Management, click on the link at the bottom of this Blog.

IMMIGRATION - NEW I-9 FORM

On November 7, 2007, the United States Citizenship and Immigration Services (USCIS) announced the issuance of a revised version of Form I-9 Employment Eligibility Verification. Employers are required to use Form I-9 to verify the identity and work eligibility of all new employees hired to work in the U.S. after November 6, 1986 (including U.S. citizens), and to retain the completed I-9 forms for three years after the employee's date of hire or one year after the date that employment is terminated, whichever is later.

The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRAIRA) reduced the number of documents which may be used to satisfy the work authorization and identity requirements of the I-9. This provision, however, did not take effect until regulations were published, so for 11 years the proposed changes have been on indefinite hold.

USCIS has indicated that employers should use the new Form I-9 starting immediately, although the USCIS will afford a period of time to transition to the new form. The Department of Homeland Security (DHS)will not apply fines and penalties for use of a prior edition of the Form I-9 until 30 days after notice is published in the Federal Register.

A copy of the new Form I-9 can be found at http://www.uscis.gov/files/form/I-9.pdf and the new Handbook can be found at http://www.uscis.gov/files/nativedocuments/m-274.pdf. The new Handbook contains updated examples of completed I-9s and updated, color copies of various acceptable documents.

To learn more about human resource issues and strategies for your family business, click on our web site www.family-business-experts.com

THE FIVE KILLER JOB DESCRIPTIONS MISTAKES – AND HOW TO AVOID THEM

Most everyone agrees that “change” is happening at a faster rate than ever before. At one time, doing a job description was something done once, and then forgotten about.

Not any more. “Jobs” are more fluid than ever before. Are your job descriptions current?

Here are some tips about job descriptions from our family business human resource experts.

1. Writing a job description that describes the incumbent, not the job. It's easy to think about the individual in the job, and write about how he or she has chosen to do the work. A good job description focuses purely on job expectations and outcomes, not how the job is handled by the person who happens to be in it.

2. Using vague wording. It is tempting to rocket through writing job descriptions by inserting vague language like "takes care of employment." Does that mean routine recordkeeping, labor negotiations, or executive recruiting? Does that entail responsibility for employment or just participation in the process? Spell it out.

3. Glossing over essential vs. nonessential functions. With the advent of the Americans with Disabilities Act (ADA), it became "essential" to separate essential functions of a job from those less so. This allows persons with disabilities to still be hired if they can carry out those key tasks (sometimes with reasonable accommodation), even if they can't do lesser tasks. Every job-description must make this separation to be ADA-compliant. If your job descriptions are fuzzy about essential functions, things won't go your way in court.

4. Failing to update. Change happens. There aren't many jobs that haven't changed significantly in the past few years. If job descriptions haven't kept up, confusion and legal challenges are headed your way.

5. Writing a job description after the fact. Courts pay little attention to job descriptions written after lawsuits are filed. That's why the time to write them - or update them if needed - is now.

To learn more about the complexities of human resources, click on the link to our web site www.family-business-experts.com

Arlington National Cemetery Wreath Project

Morrill Worchester is a family business owner with a big heart and a wonderful vision. In 1992 Worchester donated 5,000 Christmas wreaths to be placed on the graves at Arlington National Cemetery.

Since that first year, the program has continued to expand. In 2006, an organization, Wreaths Across America, was created to carry the program forward. In its first year, Wreaths Across America wreath-laying ceremonies were held at more than 240 national and state veterans' cemeteries across the country and in Puerto Rico. In addition to sponsored wreaths, 10,000 holiday wreaths for Arlington National Cemetery and 4,000 holiday wreaths for ceremonies in all 50 states plus offshore veteran's cemeteries around the world will be donated by Worcester Wreath Co. in 2007.

A message from Merrill Worcester:

"On behalf of everyone at Worcester Wreath, my wife Karen, our family, and all the people who have made the Arlington Wreath Project their work for so many years, we wish to express our appreciation for the many phone calls, email, and letters of thanks. It provides the inspiration for all of us to renew our commitment to honor the men and women of the armed forces who have served, and those who are currently serving our country. To each, and especially those who made the ultimate sacrifice, we owe unwavering support and a profound debt of gratitude for preserving the way of life we all enjoy here in the United States of America."

To learn more about becoming a sponsor for a great program for honoring our Fallen Heros http://www.wreaths-across-america.org/

No Place Like Home For The Holidays - Tips From Dr Jane Adams

While holidays offer a special opportunity to draw grown kids and their families back to the heart of shared traditions, they can also be emotionally charged occasions. Young adults come home because they want and need to stay connected to us, but often tension and conflict destroy that loving feeling. Before you buy the turkey or the brisket, ask yourself these questions:

. Does your invitation conflict with their obligations to their in-laws or interfere with traditions they want to establish in their own homes?

. Do you think of family holidays as a chance to resolve misunderstandings, discuss what they're doing wrong in the family business, or deal with conflicts with your adult kids?

. Do you refuse their offers to help, insist on doing things the way you always have, or treat them the way you did when they were children? Q. My kids hate going to their grandparents’ house for holiday dinners because my father goes on and on about taking them into the family business when they finish college.

A. Enlist your mother in the campaign to get your dad to back off. Rehearse with your kids so they have some rejoinders – polite ones, like “I’m really not sure what I want to do yet, but I appreciate the opportunity,” and variations of that, or even non sequitors like “Do you think the rain will hurt the rhubarb, Gramps?” which is your cue to back them up by changing the subject. Q. My kids keep making excuses about why they can't come for Thanksgiving or Christmas dinner. What's really going on? A. If it's really too far or they're too busy, offer to meet them halfway and establish new ways to celebrate together. Or suggest an alternative - Christmas dinner with you on Twelfth Night, Thanksgiving on Saturday instead of Thursday, or an invitation to their in-laws to incorporate their family traditions into your celebration. Q. Every time our kids and their families are together, there's an explosion! They fight with each other, they fight with us, and everyone ends up with heartburn.

A. If every holiday ends in disaster, maybe you're seizing this opportunity to get to the bottom of sensitive or troubling issuers, or ambushing your kids by bringing those problems up on what should be a festive or sacred occasion. Don't just sweep those problems under the rug, but make private time with your kids before or after the holidays to discuss what's going on. Q. My grown kids don't get along - never have and never will, despite my efforts. Holidays at our house are tense and angry. Should we make them park their animosities at the door or cancel our celebration? A. Being under the same roof may just set their tempers on edge, and there's nothing you can do to stop it. Instead of sticking with your traditional celebration, plan separate occasions with each of your kids - perhaps Christmas Eve with one set, Christmas Day with another.

Religion - A Family Business

When we discuss family-owned business issues, not many people think of religion as a family business – but it can be. In fact, some well known religious leaders are involved in "generational" family businesses – people like Billy Graham, Oral Roberts and Robert Schuller.

Now we read about a news story from New York where a minister and his wife are getting a divorce and the woman is claiming that the minister’s church should be considered as a marital asset.

The wife contends that her husband, the minister, commingled his personal and his church monies and apparently the judge in the case agrees as a financial valuation of the church has been ordered!

The wife said her husband has used the church as his “personal piggy bank”.

The couple has been married for 31 years and $50,000 of their own money was used to start the church. Accordingly, the wife claims a partial interest in the church.

"That church is no different than any other business he might have opened," said the wife's lawyer, Robert Pollack.

The wife further claims that her husband was also running a catering business from the building according to Judge Arthur Diamond.

“Marriages fail - so do family-owned businesses” according to Dr Jane Adams, a family business divorce expert with the Family Business Institute in Atlanta.

“Without a strong family business divorce strategy, the cause and effects of divorce on a family business can be a profound threat to the family and to the business.

Of all the catastrophic events a family business can face, one of the most difficult to deal with is divorce.

Divorce in a family business touches everyone in the family. It can also impact non-family executives working for the family's business. We recommend to our family business clients to think beyond just the legal ramifications of divorce - and to develop a comprehensive family business divorce strategy.”

To learn more about divorce strategies for families in business together, click on our web site www.family-business-experts.com

Family Businesses Are Not Immune From White Collar Crime

Harold Copus, Director of Security for Atlanta-based Family Business Institute, addressed “white collar crime” in speeches to the Institute for Supply Management (ISM).

Harold Copus, a well known former FBI Special Agent and Forensic Accountant, serves as Director of Security for the Family Business Institute in Atlanta.

Copus specializes in complex financial and white collar investigations. He has significant corporate litigation-support experience and is recognized as an expert witness in fraud investigations for the U.S. District Courts in North Carolina and Florida.

He has been interviewed extensively on Fox News, Court TV and featured on several Dr Phil Shows for his success in finding missing children. Harold Copus was invited by President George Bush in 2002 to participate in the White House conference on missing and exploited children.

"When I first heard Harold Copus describe some of his adventures tracking down white collar crime, including the mis-appropriation of procurement funds, I knew he'd be an exciting presenter to purchasing organizations." said Jon Harvill, Career Center Director for the West Georgia affiliate of the Institute for Supply Management (ISM) and president of Dunhill Search of West Atlanta. Harvill introduced Copus as the key speaker at West Georgia's monthly development meeting and Copus held the groups attention with countless stories and valuable lessons. Harvill also recommended Copus to be the speaker for ISM's Atlanta Affiliate. Following that well received presentation, Lauchlin McKinnon, VP of ISM Atlanta said, "I knew this topic would go over well with members." and thanked Harvill for introducing Copus to them. Harvill observed, "I have heard Harold speak on a number of occasions and welcome opportunities to hear him again because he always has new stories.”

“Dealing with ‘wrong doing’ in a family business can be very complex, especially when the issue involves a member of the family,” said Don Schwerzler, Founder of the Family Business Institute. Because of Harold’s expertise in dealing with sensitive family business issues, he and his professional team of investigators are generally retained by our family business clients to conduct internal and external investigations that can range from pre-employment checks to drug use in the work place. Other typical investigations include employee theft of merchandise, equipment and other types of company assets through fraudulent accounting practices, or selling confidential information, otherwise known as industrial espionage”.

“A new family business issue that we are preparing for is “kidnapping for ransom”. That is a large industry south of our borders – and with the influx of illegal immigrants, we are anticipating an increase in this kind of crime in our country. We are recommending to our family business clients that they consider security precautions for protecting their children and grandchildren,” said Schwerzler.

Family-owned businesses that are concerned about security issues can read more about using a private investigator by clicking on the link at the bottom of this Blog.

Organizations interested in having Harold Copus speak to their group can contact Harold Copus at the Family Business Institute in Atlanta – 770.952.4065.

Family Trivia Game

It seems almost every week there are new revelations about toys imported from China that have harmful levels of lead – something that can harm, even kill children. We recommend a family trivia game that is made in America – a “lead-free” board game!

The game was first invented by Bob McClure. He and his wife Sally were school teachers in California – with small children and too much debt. As Christmas approached, Bob and Sally decided that the family would not buy any presents but instead they would make presents for each other. That was the genesis of the McClure family business headquartered in Chautauqua, New York.

The game is based on family trivia. There are some generic questions that ask questions such as “If each family member was going to have a car named for him/her, what would it be?”

There are an equal number of blank cards so that each family can pose and answer questions about their family. “What was Grandpa Jones first car? Where did Uncle Earl serve when he was awarded the Silver Star while serving in the Unites States Marine Corps? What was Aunt Susan’s favorite bible verse – and why?”

As you play the game, the answers to the family trivia questions are written on the back of the cards so as you play the game you are actually creating a written family history – a very clever idea!

With the Holiday Season around the corner, a time when families get together – this game makes a hit with family members young and old. It is a great gift for the entire family – for holidays, for family reunions – for anytime!

For more information on this family trivia game, click on the link at the bottom of this Blog

Family Business Re-generation

Almost 30 years ago Jim Hankes and his wife Kae started Thrushwood Farms Quality Meats in Galesburg IL.

Currently they operate out of an 8,600 square foot facility but are in the process of increasing the size of the facility by 20% - hoping the addition will be completed by their 30 year anniversary in May 2008.

Helping drive the expansion is their new certification to ship meat and other products to other states – a major innovation for the family’s business.

"It looked like we could have faded into the sunset," he said if his sons had not returned to Galesburg to become part of the operation. "It's like putting a brand new battery into an old car. We never pushed the kids to come back. In fact, we encouraged them to go out in the world and try other things."

Education is an important part of the success of Thrushwood Farms. "We actually have five of us who have our bachelor's degrees and I have my master's degree in meat science," Jim Hankes said. "People don't understand all the science and technology involved in making meat products."

His son Doug graduated from the University of Illinois - a degree in animal science and a specialization in meat and food science technology. When he left home to attend college, coming back to work in the family business was not in his plans. However, he worked as an intern for a large international business and that experience helped him to realize that he could have a more fulfilling career working with his dad, mom and brothers.

"I was totally ready to work for a big company," he said. "I found out there were a lot of opportunities in the food business, but you do one or two things every day." "I decided I was looking forward to the opportunity," he said. "I wanted the opportunity to develop new products."

"I love Galesburg," Doug said. "I knew coming home and working with the family business would offer a lot of benefits, but there are a lot of challenges."

For many family businesses, succession is just about passing the business from one generation to the next – the focus is primarily on “transgenerational” issues. Family businesses, like Thrushwood Farms, that want to grow their family business - include innovation as part of succession management - so that succession becomes a “transformational” opportunity.

Succession time is an opportune time to work on creative changes and new ideas for the family’s business. It helps to regenerate and reinvigorate the family business with the passion that is associated with positive and healthy change.

To learn more about creating an innovation strategy for your family business, click on the link to our web site www.family-business-experts.com

Resume Tips

As a family business grows, problems become more sophisticated – therefore the need to recruit more sophisticated managers increases as well. Finding the right person for a key management position in a family business can be crucial to the on-going success of the enterprise. When a family business client asks for help in dealing with recruiting issues, we recommend Jon Harvill, a recruiter with more than 40 years experience.

Jon Harvill and his son JD run Dunhill Professional Search in Atlanta. At a recent family business conference, Jon offered some insights on how to write and/or evaluate a resume:

Other resume readers may have different priorities, but, as a headhunter, I judge a resume by how quickly I can get the information from it that I am seeking. Clearly stated job titles, company affiliations, and bulleted accomplishments work for me. A resume loses credibility the first time I observe an ambiguous statement about a degree received (or possibly not), of a nebulous certification attained, or even unexplained gaps in employment.

The resume has one primary purpose: to lead to getting a job interview! It is a marketing piece, not a personal history or autobiography. The following suggestions may help make it more effective:

• Keep it brief - one or two pages, with sufficiently wide margins.

• Keep it neat. If it is likely to be copied, use plain white bond paper. Check that the copy is free of typographical errors, misspellings, grammatical errors and smudges. • Be meticulously honest, but accentuate the positives. Highlight pertinent accomplishments, directly related experiences, and academic achievements.

• Omit nearly everything else. (Be sure to include name, address, e-mail address and telephone number.)

• Your "track record" is important. State specifically how you saved time and/or money, or helped the company make money. Use action verbs.

• Reread your resume before sending it out. Let friends or business associates check it with a fresh eye and a less biased perspective.

• Rework it until it is perfect, but not at the expense of delaying action in your job search.

• When possible, tailor your resume for each specific job you are seeking. Include the exact words from the job posting