Good family businesses are business-first families
By DAN WHEAT
YAKIMA, Wash. -- Most families who own businesses put families first when it comes to the business but they should put businesses first if they want either to succeed, a business succession counselor and Iowa farmer says.
Many times families are eager for other family members to join their business but once they do they can't get along, Jolene Brown told more than 1,000 tree fruit growers at the 108th annual meeting of the Washington State Horticultural Association.
"Some can't wait for the old man to die. Tempers flare. They fight. People end up in hospitals with brain concussions but they still farm together because -- families farm together," said Brown, a corn and soybean farmer in West Branch, Iowa.
"Sometimes family-first businesses work but it's luck. A business-first family means honoring the family so much that I'd better get the business right," she said. Doing otherwise, she said, threatens the business.
Common mistakes in family businesses are assuming genetic relationships equal good working relationships, believing a business can financially support any and all family members who want to work together and assuming others must change, Brown said.
Poor communications, presuming conversations are contracts, forgetting common courtesy and ignoring in-laws, off-site family and employees are more pitfalls.
Skin in the game, education, experience preferably in another business and real desire to do the job are all prerequisites for owning a family business, Brown said.
Skills, character, personality and education all go into choosing next family business leaders wisely or it defaults to the oldest son or "anointed golden child" who can do no wrong, she said.
Brown and other speakers went into more details of succession planning during the meeting's opening day, Dec. 3, at the Yakima Convention Center.
Among items they noted is the uncertainty of estate planning when the estate tax exemption falls from $10 million to $2 million per couple and the estate tax rate goes from 35 to 55 percent if the Bush-era tax cuts expire. Obamacare is a big tax on business on which all boats will rise or sink while continuing to face global competition, said West Mathison, president of Stemilt Growers Inc., Wenatchee, the nation's largest non-citrus tree fruit company.
Mathison and others participated in large and small grower panel discussions on succession planning.
Stemilt has progressed, Mathison said, from days when his father and grandfather "screamed at each other" when meetings grew hot to personality profiles and 360-degree reviews by one's boss, self, peers and subordinates as tools of improved communication.
David Douglas, president of Douglas Fruit Co., Pasco, said that company makes sure any family member has needed skills before being hired and has done better in defining roles and jobs.
Dale Foreman, owner of Foreman Fruit Co., Wenatchee, recounted the biblical story of Joseph as a family "succession problem. His brothers were so jealous of the golden boy that they decided to kill him but then sold him into slavery," Foreman said.
"If anyone is thinking of suing a family member they should first read 'The House of Mondavi: The Rise and Fall of an American Wine Dynasty,'" Foreman said.
"They sued each other until the family lost everything," he said.
Later, returning to the story of Joseph, Foreman grew emotional when he said the story ended well with wise planning for the famine foretold in Pharaoh's dream.