Great Ideas for your Small Business: Consider Joining the Family Business
Joining the family business is no picnic. But with more people spurning the corporate world for entrepreneurship, taking over the family enterprise has become an attractive option for many. “I felt like there was a real need for me to get out of the corporate world,” said Susan Chicone, who left a job in corporate communications to join the family’s Orlando real estate and citrus company.
Since then, she’s been busy not only learning the business, but also figuring out where she fits into the big picture. The job skills she acquired in New York were helpful, but she didn’t know the nuts and bolts of growing oranges and developing land.
She’s had a good teacher: Her father, Jerry Chicone, was given his first orange grove when he was seven years old. His father founded the business in 1919, and there was no question Jerry would join the company.
Susan admits she was a little nervous about the move because her brother had worked in the business and found that there was a good deal of friction involved when working with family members. But she decided it was worth a try.
One of the first things her father did was suggest Susan take some accounting classes to hone her financial skills. “I want her to be sharper than me about planning and zoning and the ability to put together partnerships with adjoining landowners,” said Jerry Chicone. “I have a good network, and it’s important that she develops a good network as well.”
While Dad meant improving her network of people, Susan was thinking more about computer networks. One of her first moves was to install computers in the office. “Nothing was computerized when I started here,” she said. “Things here had been done the same way for fifty or sixty years. I like to get things done and move on.”
Although she owns a piece of the business with her sib- lings and a cousin, Susan Chicone is the only one involved on a day-to-day basis. She expects that someday she’ll take over her father’s job, but they haven’t discussed a time frame.
Halfway across the country, Barbara Gondela decided that buying her Chicago-based family business was the best strategy for her and her husband—but it wasn’t easy. Her parents preferred to sell the Service Stamp Works, Inc., rather than let the kids fight over who would inherit it.
“There was a lot of emotion involved,” Gondela said of the stressful eighteen-month process. They finally turned to the family accountants to act as negotiators. When it was all over, Barbara and her husband basically bought the building and acquired the stamp company’s assets.
When choosing a successor for your family business, communicating your future hopes and goals is critical, not only on the management side but also on the financial side, according to family business financial experts. “Waiting until you are terminally ill to think about succession is not a good idea,” said Henry Ritter, former chairman and chief executive officer of Trust Company of America in Chevy Chase, Maryland. “Analyze the business now and look at the real cost of estate taxes.”
Ritter said too many family-owned businesses end up on the block to pay estate taxes, which can be close to 55 or 60 percent of the company’s value. “Sit down and talk about the future of the company with your kids,” advises Ritter. Be sure to figure out ahead of time who will own the business, who will manage it, and how outsiders fit into the picture.