Keeping businesses in the family <br>can be no small feat

Collette Vacations is the oldest tour operator in the nation, started in 1918, and one of the largest, with 581 employees and more than 130 vacations offered on all seven continents. But it’s also a family business, owned by the Sullivans for 35 years now.
“We run the business like a business and the company like a family,” said Daniel J. Sullivan Jr., president and CEO. Collette has plenty of non-family staff, of course, but his wife, siblings and children are involved in the business to varying degrees.
Sullivan’s son, Dan IV, and his daughter Jaclyn, for example, just went to Tibet with him for a sales team meeting, then tagged along to Laos to explore future business opportunities.
“It is great to work with family, but there is no pressure for them to join,” Sullivan said. And Collette has policies in place for those who want to become part of the team.
“There are seven kids and 17 grandchildren, and they all have the same rules,” he said. “But the kids are mostly younger. No one has been out of college for three years [the minimum to join Collette] except for my children.”
In October, Sullivan’s youngest daughter, Nicole, joined the business.
Family-owned businesses make up the vast majority of U.S. companies, 80 to 90 percent of the total or as many as 22 million, according to different estimates. But only about 30 percent survive into the second generation, about 12 percent into the third, and 3 percent beyond that.
Wayne Rivers, co-founder and president of the Family Business Institute in Raleigh, N.C., said one of the reasons family businesses don’t continue is that family relationships and emotions get in the way. And children grow up watching their parents’ anxieties.
“Many people bellyache about a customer, or the banks, or an associate over dinner,” he said. And parents don’t highlight the positive aspects of the business to encourage their children. “There really is no interfamily marketing,” he said.
Bob Comerford, a professor of management at the University of Rhode Island who teaches courses on small business and entrepreneurship, said it’s not always a bad thing if a business isn’t passed on from generation to generation. Many of his students, he said, are the children of small business owners.
“Some of those kids look forward to going into the family businesses and some think it is the worst thing that could happen to them,” he said. “But not having the business passed on doesn’t mean the business fails. It might even be a positive.”
Many parents start businesses so their children won’t have to face the same economic challenges they faced, Comerford noted. The children are given opportunities and not obligations.
“If [the kids] were forced to participate,” Comerford said, “they might not do as well with the business as the past generation.”
Those who do join their parents’ companies can face challenges as well. Rivers said 80 percent of the calls he gets are from junior family members who are at wits’ end with parents who continue to dominate the business. Then there’s the respect issue.
“When the family members of the business are 85, ‘little Billy’ is still going to be 20 years younger than they are – thus a mere child in their eyes,” noted Comerford.
Sue Barker, director of the Small Business Center at URI for many years and now the executive director of the Washington County Regional Planning Council, said that when there are multiple children, it’s important to identify the successor and nurture him or her.
“Often the eldest child thinks they will take over the business, and if another, younger child emerges, the more talented person, then that causes family problems,” she said.
But younger generations also can enrich their parents’ business with new skills and knowledge. “Newer family members can be very technologically savvy, with a degree in engineering and lots of computer exposure, while Dad may not be,” Comerford said.
At Collette, Dan Sullivan IV is making the business greener. He recently initiated a program to use renewable energy at the Pawtucket company, his father said, and they’ve already priced out solar panels and are encouraging company executives to drive hybrid cars.
Savvy children, at the same time, understand what made their parents successful.
“There’s nothing my father wouldn’t do for a customer,” said Scott Sherman, who has taken over his father’s business, Jamestown Hardware Store. His father continues to work at the store three days a week.
The Shermans have the only hardware store in Jamestown, but they face strong competition from large chains. The family tradition, they said, helps them remain successful – that and the fact that they’ve turned the store into a community hub, accepting UPS packages for customers, sending out faxes, and offering free notary services.
Scott Sherman isn’t sure what will happen with the next generation, but he’s optimistic.
“My son Steven started working at the store at 14 – he’s headstrong and all for it,” he said.

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