Lesson #2: A family doesn’t need to be perfect – it just needs to be united.
Therein lies the challenge.
Family businesses and their leaders face tremendous stress. Not only are they dealing with all the challenges of business, but the family business system inherently intertwines business, family and ownership – and it gets messy. Family dynamics bubble over with varied perspectives, generational differences and tenuous relationships. It’s hard to be united when there seems to be a steady flow of drama, conflict and disharmony. The angst and stress can be overwhelming causing many family business owners to hide it, ignore it or deny it. Whether it is pride, privacy, anxiety or, perhaps, a combination of all three, the issues are often the reasons family owners barricade themselves inside the business and are reluctant to seek outside help.
There is a way out.
There is a way to build a successful, multi-generational family business that doesn’t suck every last ounce of energy out of you. It starts with giving up the notion: “I/we will figure it out (X) on our own.” That mentality leads to a long, arduous journey that often ends up in failure.
The statistics don’t lie. Just 33% of family businesses make it to the second generation, 12% to the third, and a mere 3% to the fourth. Read that again.
One of the ways to beat these odds is to band together with other family businesses in a family business center. This is a community where the other members “get it.” They have walked in your shoes – maybe five years ago, last year or as recently as yesterday. A family business center provides a safe harbor where family businesses gather to learn, support one another, share stories and solve problems. You don’t know what you don’t know, and a family business center is where you can begin to uncover some of the secrets to building a successful family business.
There is an old adage that states, “A rising tide lifts all boats.” A family business center can be that rising tide and lift those businesses and families that come onboard.
The S. Dale High Center for Family Business was founded in 1995 in Lancaster. It is one of the largest and oldest family business centers in the country, supporting more than 120 member companies. To raise the tide for even more family businesses, their leadership team launched a regional presence here in the Lehigh Valley to serve family businesses in Lehigh, Carbon and Northampton counties. And In September, they launched a regional presence in Berks County.
This is a membership-based organization for family-owned and privately held businesses with revenues between $3 million and $100 million, where leaders come together to learn best practices, attend educational events and seminars, and have the option to participate in peer advisory groups.
In these non-compete group settings, leaders meet to tap into each other’s insights and experiences around business, family, ownership and personal matters. There is integrity and confidentiality among the members, allowing family business leaders to help one another with their toughest challenges, identify and pursue their most promising opportunities, and develop solutions for growth.
When you give a voice to that which is hidden deep inside, you take its power away. That’s the first step in moving the family and business forward. That is exactly what this family business center facilitates and why Compass Point is the Founding Corporate Partner here in the Lehigh Valley.
We know first-hand the power of learning together, realizing you are not alone, getting unstuck, building lasting friendships, and finding solutions to the challenges you face in your family business. This is the rising tide that lifts all boats.
If you’re serious about building a successful multi-generational family business and want to be sitting with the best family businesses from this region, you should become part of The High Center for Family Business – Lehigh Valley.
The tide is rising. Will you be rising with it?
Contact Scott Burky at [email protected] to learn more about membership. For upcoming events visit: www.thehighcenter.com/events
Tom Garrity is managing partner at Compass Point Consulting LLC in Hanover Township, Northampton County. He can be reached at [email protected].
Simon Sinek will be one of the featured speakers brought to the region by the High Center. PHOTO/FILE –
The High Center for Family Business, which is run out of Elizabethtown College in Lancaster County, is expanding into Berks County.
The center, which is the oldest and largest family business center in the country, offers family-owned and privately-held companies confidential executive peer groups, educational seminars and business tools that help strengthen the business through succession planning, leadership training and legacy building.
This is the High Center’s second expansion this year. In May organizers announced they were bringing the program to the Lehigh Valley.
“Berks County’s business community has been a key driver of the region’s success because of the significant number of family-owned businesses and privately held companies in the area,” shared Scott Burky, managing director of new markets with The High Center. “We saw the value of bringing a new set of resources and peer group opportunities to the region’s midsize to large family businesses.”
The High Center is bringing in a variety of national and regional speakers such as Sima Dahl, brand expert; Doug Box, family advisor and author; and Rene Rodriguez, leadership advisor, world class sales expert and renowned speaker coach. Globally recognized thought leaders Simon Sinek will speak on Sept. 27, and Jim Collins will speak March 30, 2022. The High Center’s core annual event is its Business Forum.
Corporate Partners supporting the High Center’s expansion into Berks County include Barley Snyder, Customers Bank, RKL LLP, Murphy & McCormack Capital Advisors, Connors Investor Services, Inc., Compass Point Consulting and the GRCA.
The High Center was started in 1995 through funding by the High Companies and other investors to help boost family-owned and privately held businesses.
When I began my career in family business consulting nearly 20 years ago, I met Dean Fowler, one of the early thought leaders in the field of family business and author of several books, most notably Love, Power and Money.
As it turns out, these 3 words line up perfectly with the famed 3-circle model developed by Davis and Tagiuri of the Harvard Business School in 1978, depicting the family business system – the intersecting circles of family, business, and ownership – love, power, and money.
It also turns out that love, power, and money can make generational transitions in family businesses very challenging to say the least. Especially as the business moves into G2 to G3, these 3 factors get muddied and blurred.
A common stumbling block is the senior generation wanting to maintain ‘power’ within the family unit as their shares get split among their children. Owners often ignore, deny or avoid the simple fact that every child may be interested in – or even capable of – running the business.
When transitions are not managed well it’s often because the senior generation is not having the right conversations around love, power and money that need to be had. In that void, a toxic environment of sibling and cousin rivalries begins to emerge, and when that happens, the end of the business is generally not far away.
If I have just summed up the current tensions that exist in your world right now, take a deep breath. It’s never too late to start building a healthy family business. And if dysfunction has not yet taken up house in your family business, these strategies will keep dysfunction at bay, or at least manageable.
Here are two things you can start doing today:
Write a family business constitution with all the shareholders of the business.
Discuss and agree on family values.
The purpose of being in your family business.
The family’s vision for the business, employment criteria, etc,
The constitution is a set of guidelines that everyone knows about and agrees to if they want to be a part of the family business. It is designed to provide a structure to educate and facilitate communication between family members. It provides assurance to non-family leaders there is a process for joining the business and that your last name is not a free pass.
A family constitution defines the interface between the family and the business and how you’re going to work together as a family in this family business. You’ll be amazed at the kinds of discussion, cohesion, and alignment that this creates for the family moving forward.
Develop a plan for the next generation of leadership. Two things are required to make a transition successful: ownership and leadership. If you do not focus on leadership first, you will not have any ownership to worry about. This is imperative to read again! If you don’t develop the leadership team, there will be nothing to own.
If you are the senior generation of the family business that is beginning to look at transitioning, let the Next Gen come up with the succession plan. Turns out, in many cases, that by having Next Gen lead here, they do a lot of the heavy lifting. Of course, you will provide feedback, suggest changes and ultimately approve it. It’s
through this process and series of conversations that you’ll be surprised how well they did coming up with a plan – including who will be in charge when the baton gets passed.
Building out a leadership team and identifying successors to key positions, including yours as the CEO, is a key driver of business value. It creates sweat equity insurance to ensure the business you have built successfully transitions to the Next Gen.
Without a healthy relationship around love, power and money, dysfunction will surely rear its ugly head and undermine your family, the business and all the hard work you have put into both of them.
Because in the end, what does love, power and money have to do with your family-owned business?
E-V-E-R-Y-T-H-I-N-G.
Tom Garrity is managing partner at Compass Point Consulting LLC in Hanover Township, Northampton County. He can be reached at [email protected]
Tolino Vineyards is an artisanal winery owned by the Tolino family in Bangor. Their wines are hand crafted from grapes grown in their onsite vineyard. Business is in the family’s blood, starting with Tolino’s Fuel Service in 1955. Mandy Tolino is general manager of the vineyards and a third generation of the family business.
LVB: Tolino Vineyards has been around for more than 13 years now. What has it been like working with your family for all this time?
Tolino: My three siblings and I started working together at the winery when we were in our twenties, which has allowed us to grow together professionally as the business grew. Reflecting back on where we started (working in the vineyard), to where we are today it is pretty amazing. Each of us has unique talents, educational backgrounds, and personality strengths that we used to find our niche in the business.
LVB: Was working for a family business always ‘in your blood?’
Tolino: Yes. Our grandfather started Tolino’s Fuel Service in 1955 and our dad, Carl Tolino, continues to own and operate the business. I worked at the fuel service as well, learning the ropes in preparation for the third generation to manage the business. Growing up we lived a few houses up the street from the business and would all spend a lot of time there playing in the office and riding around on the tractors and trucks. When the winery opened, we had a lot of family business resources to turn to for advice. Each of us took our own path to land back at the business, some right out of college, while others worked in other jobs before returning to the business.
LVB: How do you share the workload, responsibilities and decision making?
Tolino: Decision making is the most challenging part of four siblings working together. There is a lot of collaboration and heated discussions about some decisions, while other things come easily now that roles and responsibilities are more clearly defined. Carl is the winemaker, Liz is the tasting room/retail manager, Mark manages our Easton location and I am the general manager. We sometimes still argue about who is going to take out the recycling just like when we were kids, but when it comes down to the important decisions and tasks we work together to get them done.
LVB: When are you at your busiest? How do you work together to get everything done?
Tolino: We are busiest July through October. The tasting room is busy with events such as Family Fridays, Sangria Sunday and fall harvest events. In September we start harvesting grapes and processing wine and everyone pitches in. During September we are all working 7 days a week and as life starts to slow down we schedule our lives so we each get some down time.
LVB: What’s the most rewarding part of running a vineyard with your family?
Tolino: Looking back and seeing that we built the business together as a team from the ground up. We started with tiny little grapes vines and now we have a picturesque winery and a reputation for making really great wines and providing our customers with a fun and educational experience. It is also rewarding that at the end of a long day of harvest or a busy Saturday that all of our kids — 10 cousins so far — are able to spend so much time together and grow up in the family business together much like we did.
Family businesses are a big and important part of the economy and account for more than 50% of U.S. GDP, and 35% of Fortune500 companies are controlled by families and family owned companies are responsible for 60% of jobs in America.
A recent family business survey conducted by the National Bureau of Economic Research’s Family Business Alliance indicates that only 15% of the family businesses have developed and documented anything appearing to be a succession plan. This is troubling because succession of ownership and leadership is a critical issue for the long-term success of a business.
Respondents to a Family Business Institute survey that asked why their business did not have a succession plan said that “time to deal with the issue” was a significant constraint. Other reasons included feeling it was too early to plan for succession, inability to find adequate advice or tools to start, finding the topic too complex, not wanting to think about leaving the business, and fear of conflict with family or employees
The undesirable result of not having a succession plan is evidenced by the great difficulty in surviving through multiple generations. A family business surviving to the second generation is a milestone event because only 30% make it through the second generation. Furthermore, only 12% make it through the third, according to PwC in “The Family Business Sector in 2016: Success and Succession.”
What Is Succession Planning?
Succession planning is a critical factor for the long-term success of any business and especially for family businesses. Leadership transitions in business affect the entire organization’s continuity, employee retention, client retention and returns on investment. It is essential to create and implement a process that creates visibility, accountability and greater integration of all facets of the business.
All business owners will depart their businesses at some point by design or by default. A succession plan
helps ensure that owners have control over how their businesses transfer to the next owner. Succession planning
is the process of developing a written plan for transition of ownership and leadership when an owner and/or
leader decides to leave the business either voluntarily, such as retirement, or involuntarily, such as death or
incapacitation.
What needs to be done to prepare for succession planning for the family business? A suggested outline of a strategically structured process for family business succession planning is presented here.
FIRST: Start with seven actions to strategically structure a succession planning process.
1: Begin the succession planning process early.
2: Clearly determine and communicate the purpose, goals, and extent of the leadership succession plan or program.
3: Clearly define the desired and required qualities of the new leader.
4: Develop a clearly focused leadership development strategy.
5: Develop a talent management process that will incorporate strategic thinking for specific development opportunities for future leaders.
6: Identify future leadership candidates by developing a system for assessing current and future leadership needs.
7: Identify a system for communicating information to ensure that the leadership succession and/or development programs are in line with strategic business needs.
Next: Follow an overall outline of the suggested planning process to create a succession plan.
I: Goals & Objectives
Develop vision & mission statements for the business.
Develop a list of core values & guiding principles.
Develop short- & long-term goals for the business.
Identify the stakeholders for the business.
Develop a personal vision with personal goals.
Develop retirement goals.
Create a team of advisors for the succession planning effort
II. Exit Strategy
Develop options for departures from the business.
Review the developed options for the exit strategy from the business.
Select the most desired option for the exit strategy.
III. Business Valuation
Obtain professional advice to determine the value of the business.
Determine the value of the business.
Determine a current value of the business assets & liabilities.
Determine the goodwill value of the business.
IV: Business Structure
Identify and quantify business debt.
Recruit & retain productive employees.
Structure business to maximize value.
Document key processes & procedures used in the business.
V: Tax Considerations
Develop financial goals.
Identify tax implications of the current business.
Plan & implement tax strategy to minimize taxes.
VI: Legal Considerations
Retain professional legal counsel.
Develop a buy-sell agreement for the business.
VII: Estate Plans
Retain a professional estate planning adviser.
Develop an estate plan.
VIII. Successor Selection
Develop specific criteria for successor(s).
Recruit and select successor(s) based upon identified criteria.
Communicate selection of successor to stakeholders.
IX: Successor Training
Develop a list of characteristics and skills needed by successor(s).
Develop a training plan for successor(s).
Develop a coaching/mentoring plan for successor(s).
Establish a timeline for successor(s) plan.
X: Contingency Plan
Develop a contingency plan (based on the “What Ifs?”).
Research & identify insurance needs (disability; personal life; critical illness; business; key person; etc.).\
Select & train a key employee to take over in case of emergency or unforeseen event.
Communicate the plan to stakeholders & advisers.
XI: Implementation Plan
Document the roles, responsibilities & expectations concerning the transition of ownership.
Identify a facilitator to make sure the process of succession is carried out.
XII: Timelines
Identify the management transition timeline.
Identify transition of ownership of your business timeline.
Identify the complete business exit timeline.
XIII: Communication
Document the succession plan.
Document how to proceed with the succession plan in the event of an unforeseen event (accident, illness, death).
Document the transition or exit strategy to inform family, employees, clients, vendors, community & all stakeholders.
I leave you with this additional thought on succession planning.
“One of the things we often miss in succession planning is that it should be gradual and thoughtful, with lots of sharing of information and knowledge and perspective so that it’s almost a non-event when it happens.” Anne Mulcahy, former Chairperson and CEO of Xerox Corporation.
Glenn Ebersole is a registered professional engineer and is the Executive Director, Strategic Business Development/Marketing for RCS Construction – a woman owned general contractor firm – in Collegeville, PA. He can be reached at 610-415-1130 or [email protected]
If you’re about to join your family’s business, or you’re an entrepreneur starting your own, the last thing you want to think about is, “What if something goes wrong?”
However, estate planning for businesses, especially those that are small and/or family-owned, is an important part of running the business. This type of planning is sometimes described as “succession planning,” and it forces small business owners and entrepreneurs to come up with a plan for every worst-case scenario.
It is an inherently difficult and uncomfortable kind of work, but for a business to survive, it is absolutely vital. So, consider these tips:
Organize your files now
This component of planning does not incorporate any legal advice; it is merely a practical tool to help you and anyone who works for you to be able to retrieve vital documentation quickly. In addition to the simple good practice and usefulness of having your files organized, it is absolutely vital to keep financial records in some sort of order, and to inform another person of where they are stored and what they contain. Whether this is a fireproof safe or a filing cabinet, everything should be stored in an organized fashion, and you should tell someone where the documents are and what exactly is in that cabinet or safe.
Draft a will and a financial power of attorney
Once the practicalities of estate planning are addressed, you will likely want to get a will and power of attorney drafted or updated. A surprising number of entrepreneurs and family business owners don’t have either, and this creates the risk of leaving your business partners or family struggling to accomplish anything.
A power of attorney is used by your agent while you are living, and your will governs after your death. Most importantly, you want to get these documents drafted while you are well, and able to make decisions.
Clients will often call to request a power of attorney for a parent or spouse currently suffering from dementia, but their loved one no longer has the capacity to agree to give financial power of attorney to an agent. The same requirements exist for the execution of a will or any other document that directs your assets after your death.
Use additional documents to direct the transfer of business assets and power
If you own a family business and have a will drafted, the ownership interests will pass according to your will. This division of assets may, in fact, be exactly what you want, but if you want the business to operate differently, you should look into other documentation. Documents such as a trust, a buy/sell agreement, or even the operating agreement can all help direct the division and distribution of the company’s assets.
If you own the business as a sole proprietor, you may need to specify that one of your children will be in charge after your death, or you may need to direct how the business must wind up.
If you’re one of several partners, you may want to allow your surviving partners to buy your share of the interest from your heirs, or you may want to direct your share to only one heir rather than divide it among all of them.
A trust may place your business outside the reach of your probated estate, and it may help provide the necessary liquidity to buy out a deceased partner’s share. Each family business is unique, and you will want to craft your estate planning documents to reflect that. You will also likely want to consult with a tax professional; federal estate taxes and Pennsylvania inheritance taxes may apply to your circumstances.
If you’re a family business owner, or about to invest in one, you are already familiar with hard work and it’s important to include estate planning in that work. Small business estate planning truly exemplifies “hope for the best and plan for the worst,” but getting it done will offer you and your loved ones significant peace of mind. With a plan in place, you can rest assured that your business and family can make it through anything.
Christina Cozzetto is an associate attorney with Weber Kracht and Chellew Attorneys at Law located in Perkasie, PA. In addition to estate planning, her practice areas include criminal defense, family law, landlord/tenant, real estate, and civil and commercial litigation.
The city of Reading, Pennsylvania as seen from the hill above.
The melancholy aphorism from “shirtsleeves to shirtsleeves in three generations” describes how too many family businesses transition from start up to tear down by the time the founder’s grandchildren are ready to move into the corner office.
According to data cited by The Harvard Business Review, 70% of US family-owned businesses fail or are sold before the second generation can take charge. Only 10% remain active businesses for the third generation to lead.
The Reading Eagle, Berks County’s hometown paper, defied these odds through five generations. Beginning January 28, 1868, the same family published this stalwart newspaper until it was taken over by MediaNews Group on July 1.
Of course, the family adapted to the marketplace over the years. On January 28, 1868, the newspaper was named the Reading Daily Eagle. At some point the word “Daily” was removed, as was the period placed at the end of its name. The paper cost 3 cents a copy.
More changes followed.
The Reading Eagle was initially distributed six days a week in the afternoon. A Sunday edition was added later. In 1940, ownership added to its business portfolio by purchasing the Reading Times, which was a morning paper. In 2002 the Reading Times was discontinued and the Reading Eagle was transitioned to a morning paper.
In 1946, the Reading Eagle Company expanded its footprint by diversifying beyond the newspaper industry into radio by purchasing station WEEU
Author and Shillington, Pennsylvania native, John Updike interned at the Reading Eagle for several summers. He served as a copy boy and occasional feature writer during summers he attended Harvard University, before leaving Berks County for fame and fortune in New York City and then Massachusetts.
It is perhaps fitting Mr. Updike told tales of everyday human beings who at times succeeded, and at other times failed before trying again. This would also describe your typical Reading Eagle reader.
What lessons can we learn from the eventual failure of this durable family business?
Nothing lasts forever. As the King James Bible eloquently states, “To everything there is a season…” By accepting this unavoidable reality, we gain a valuable dose of humility. There is no shame in being humble. It is what motivates us to rise earlier, work harder and think more creatively.
You can’t outbox a gorilla. The Reading Eagle, like so many newspapers before it, was ravaged by the tornado otherwise known as the Internet. This disruptive technology sucked advertising dollars out of display and classified advertising sections. When you can’t outbox your opponent, you must find other paths leading to victory.
Vacant retail storefronts. The Internet has also disrupted the retail space. Fewer retailers meant fewer dollars going to the Reading Eagle advertising Back to School, Memorial Day, Presidents Day and holiday season sales.
The cost of new technology. The company recently invested in an upgrade to its printing press and distribution center. This upgrade left a king sized debt hangover.
To look at the eventual demise of the Reading Eagle as a failure is to ignore far more than a century of success. Peter Barbey and his family have been delivering the news in a timely manner to Berks County residents for 150 years. Yet, it can still be a constructive exercise for family businesses operating here in the Lehigh Valley to take a moment to consider this ending to take away lessons.
Beware of a disruptive technology like the Internet when it first appears on the horizon. The sooner you take corrective actions, the more likely you will be able to withstand it.
Think deeply before investing heavily in capital improvements. Determine if the return will exceed your investment. If not, consider other alternatives before risking the long-term health of your family business.
Remain open at all times to all options. As a Mergers & Acquisitions specialist, I know a well-timed merger or acquisition can preserve your family’s assets.
Always know where you are going to land. Retired Hall of Fame basketball player Walt “Clyde” Frazier, when working in the announcer’s booth, was asked by his colleague if he ever recklessly jumped for the basket when taking a shot. He replied, “I never jumped up without knowing where I was going to come down.” By keeping a current copy of your exit strategy in the top drawer of your desk, you will always know where you are going to come down.
Michael Lamm is Managing Partner at Corporate Advisory Solutions (www.corpadvisorysolutions.com), a boutique merchant bank headquartered in Philadelphia and serving Lehigh Valley businesses. Michael can be reached at [email protected] or 202-904-7192.
Dennis Morton of Morton Brown Family Wealth (Photo submitted) –
As a financial adviser, Dennis Morton has integrated his academic background in history and finance with his professional background as an Army officer and entrepreneur. Along with his partner, Katie Brown, they have drawn on our decades of combined experience and designed Morton Brown Family Wealth to advise families, including business owners, on their unique financial opportunities and risks.
LVB: Do those in family businesses have different financial planning needs than those who work for larger corporations?
Morton: Family business is different because the means of building personal wealth are as unique as the businesses themselves. In a larger corporation, employees make use of a defined set of benefits like a 401(k), pension or deferred compensation. In a family business, so much of a family’s financial security is tied up in an illiquid enterprise. There are more risks and more opportunities and that is what makes intentional planning critical.
A career’s worth of good business decisions can make the business a very valuable asset for the family. However, building wealth outside of the business and exiting on their own terms is a distinct challenge for family business owners. Uncertainty is the enemy when it comes to weighing complex retirement, estate, and tax implications for a family business.
LVB: What are the most important financial planning concerns for those with family businesses?
Morton: We are focused on two common concerns, one perpetual and another more a function of where we are in the economic cycle. First, family businesses should always be focused on how to grow and manage liquidity in a financial plan. The privately held business and real estate may represent the bulk of the family’s wealth, but access to cash gives owners flexibility to make good decisions about everything from growing the business to exiting on their preferred timeline.
The second concern is about timing: When is the right time to grow and when is the best time to exit the business? The economy, especially in the Lehigh Valley, is good and has been for some time. We hear owners say: “I think I can walk away from the business and financially be ok, but is now the right time?” This is a more complex question that requires us to explore what the owner is retiring to as much as what they are retiring from.
LVB: Are there any pitfalls to avoid?
Morton: There is risk to the family if their financial plan is dependent on one person. As in many families, we find that a single person often knows all the details about the personal balance sheet, succession, insurance and the estate.
In a family business it is doubly challenging if that same person is indispensable to the enterprise. Many people who are dependent on the success of the financial plan, including their spouse, can feel left in the dark. If anything were to happen to that one person, life insurance can help soften the impact, but the burden of financial decision making can be overwhelming. The plan must be more than just insurance.
Communication between spouses and multi-generational owners is critical because everyone should understand how ownership in the business contributes to their financial well-being. If you as the owner feel you can’t communicate your financial plan effectively, it may be time to engage with a professional.
In the age of automation, not many food manufacturers and distributors hand cut their own meat.
R&R Provision Co. of Easton, a family-owned and operated food distributor and manufacturer, celebrated its 85th anniversary this year. Here’s R&R Provision President Richard “Rick” Rogers II, inside the company’s store. (Photo by Brian Pedersen) –
But one still does.
The family-owned and operated R&R Provision Co. in Easton is counting on that more personalized service to help fuel its longevity.
The privately owned company celebrated its 85th anniversary this year and continues to serve restaurants, country clubs, culinary arts schools, hospitals, nursing homes and other organizations with wholesale products that include specialties such as corned beef brisket, ribeye, tenderloins and boneless Delmonico steaks.
“We’re not just a food distributor, we’re also a manufacturer and we make a lot of products in-house,” said R&R Provision President Richard “Rick” Rogers II. “We also do custom cuts of steaks – beef, pork, lamb and veal – that’s really our forte. Our niche is our manufactured products.”
R&R started as a specialty food supplier, founded by two men named Ralph and Russ who lent their names to the company. In 1980, Rocky Rogers bought out some of the original owners and in 1991, his son Rick joined the company, turning R&R into a family business where Rocky still serves as company chairman.
Today, the company occupies space on Northampton Street in a nearly 40,000-square-foot warehouse and manufacturing facility with an adjacent retail shop that sells the company’s products.
The store offers customers the chance to buy grocery items such as ready-made lunches, veal patties, holiday and party platters, sausage, and scrapple, a regional version of meatloaf popularized by the Pennsylvania Dutch.
The company has been in the same spot at 1242 Northampton St. since the beginning opened its current warehouse/manufacturing plant in 2009. Today, the company employs slightly more than 30 people and has eight trucks.
With 1,500 customers, the company ships within a 250-mile radius of Easton, with truck deliveries Monday through Friday, Rogers said.
What makes the business a rare find in the valley is the fact that it uses employees to handle the butchering process, rather than machines.
“We process fresh ground beef every morning,” Rogers said. “The USDA [U.S. Department of Agriculture] is on the premises every day when we do processing. We’ve been around the meat business a long time.”
Many of the company’s employees have been at the company for a long time, too, with minimal turnover.
“It shows that we have a craft,” Rogers said. “It’s a dying art, butchering. A lot of the big guys will put them in machines. I think the hand cut is a nice touch.”
Finding skilled people who can do butchering, a physically grinding and messy job, is a challenge, Rogers said. And he believes it’s an issue throughout the food service industry
Having worked full time for the company for 28 years, Rogers, who lives in Allentown, said it’s rewarding to see everyone grow and change over that time.
The company still makes some of the original 1934 recipes for its products.
R&R has been in business since 1934, but it is always looking to make new products, including offering marinated steaks and grass-fed beef.
In addition to serving just about every diner in the valley with its products, R&R also sells to many local restaurants. These include notable Lehigh Valley names such as Aladdin, Youell’s Oyster House, Adobo Latin Kitchen, Jimmy’s Hot Dogs and Yocco’s.
“Our challenge has been trying to fill the requests of people that moved from the Lehigh Valley area that grew up on [our] manufactured products.”
The company has not ventured into selling online in any significant way and has only a minimal presence on the web. However, the company has recognized that it needs to expand its reach on the web and think about selling nationwide.
“We are definitely planning on expanding,” Rogers said. “We are trying to branch out into some new territories. We have a lot of new ideas.”
An old adage says business and family don’t mix well. Don’t tell that to Lauren Albright. At just 27 years old, she is a key player in her family’s successful business, Creative Tile Imports in Allentown.
Lauren’s father, Albert, and grandfather, Albert, Sr., started Creative Tile as a small family business in 1999. Today, Creative Tile has a busy 5,000-square-foot showroom and customers from around the country.
And Lauren, whose grandfather passed away in 2004, joined the company in 2013 and is now part owner of this family legacy, along with her mother Jane and father. Her sister, Olivia, is also part of the business.
Despite the challenges that come with working alongside her parents and sibling, Lauren wouldn’t have it any other way.
Lauren Albright, part owner of her family’s business, Creative Tile Imports in Allentown, with her dog, Roux – submitted
“I love it,” she says, “I really do.”
Her job is demanding; there are design consults, international orders to be placed and staff to manage. But, what few Creative Tile customers know is that Lauren also faces the demands of a chronic, life-long illness called Cystic Fibrosis.
An inherited disorder that damages the lungs and digestive system, the disease affects the cells that produce mucus, sweat, and digestive fluids, leaving them prone to infection. She was diagnosed with CF as an infant. But Lauren has survived and thrived in the face of what can sometimes be a terminal diagnosis.
LVB wanted to find out more about this hard-working young woman, and how she successfully juggles the many needs of her health, her career and her tight family life.
Here’s how she does it.
You weren’t always interested in becoming part of the family business. Tell us what you did before coming on board at Creative Tile?
I went to culinary school after high school. After graduating from the Culinary Institute of America, I started a food truck with my sister, Olivia. It was a pie truck, called “Sweet and Savory Pies.”
We both had to work other jobs in addition to the food truck to get by. I started working with my family. My sister was working at WFMZ-TV. The food truck hours were so crazy, and we both found that we were finding real fulfillment in our other jobs. So we decided to let go of the food truck and I made the family business my focus.
If you had told me as a teenager that I would be working here full time one day, I wouldn’t have believed you. But I love it.
As a young woman in a somewhat male dominated tile industry, have you experienced any sexism?
I have experienced some doubt in my abilities by certain contractors. They may have been doing this for 60 years and can be reluctant to believe that the “girls” know what they are doing. They will call and ask for one of the men. I assure them that we girls know the answers, we really do.
What do you find most challenging and conversely, most rewarding, about managing the family business?
Just the day-to-day work is challenging. We are always trying to get bigger and expand, and I’m always trying to keep our staff motivated to keep growing. We have a fantastic staff so they don’t need a lot of motivation. We do things like have company get togethers to keep the staff’s morale high.
Half of the staff is related to each other, and the others, well, we like to say they are family, too. We want to make sure that everyone is enjoying their job, that they are challenged and happy.
Most rewarding? For me, bringing in new business is an accomplishment and exciting. I love sales.
What is it like to work with your family; to be together all the time?
For me, it’s great. Family can always be a challenge but I think it’s challenging to work with any people regardless. But you know these people so well, you’ve already been working with them for so long, it works. It can be emotional, however. You can feel personally offended by things that you might not from someone you are not related to. We can butt heads from time to time but my mom tends to be a good conflict resolver.
When you aren’t working, do you try and spend time away from your family to get a little needed space?
No, we actually spend a lot of time together outside of the business, too. We have family dinner every Sunday. We work out together two or three times a week. Family is what we do.
In addition to work, Cystic Fibrosis is a part of your life, too. What do you need to do daily to manage your health?
I have to do two treatments every day, at least: two nebulizer breathing treatments, and then I have to wear this thing called “the vest,” which shakes you for 20 minutes (to loosen the mucus). It’s definitely an added thing to my day. I probably spend an hour and a half on treatments every day.
I used to skip treatments sometimes in high school, but I’ve become better at it and more responsible with it as I’ve gotten older. I realize how important it is to my health. I work out, in part because it helps you cough. Anything that helps you cough is encouraged.
Have your methods of treatment changed over the years?
Definitely. I need to be better about treatments now. As you get older, your lungs get more scarred from infections from over the years. But now I’m part of an experimental treatment for a drug that was just sent for FDA approval. It’s been incredible. It’s raising people’s lung function.
People are living a lot longer today. They are making a lot of strides. The CF foundation is really good at finding effective medications.
Is CF something that is passed down from your parents?
Lauren Albright, pictured on left, with her family-father Albert, mother Jane, and sister Olivia, outside their family business, Creative Tile Imports in Allentown – submitted
Yes, it is genetic. One in 30 Caucasians is a carrier. My sister is a carrier. I have it. My parents are both carriers. Your parents both have to be carriers for you to get it.
My sister’s husband is not a carrier, so her kids do not have it.
I will pass on the gene, and my husband is a carrier, but with a more-mild gene, that doesn’t always develop CF.
It’s a complicated and rare disease, so no one can give you an exact answer on if your child will develop it.
Are customers at work aware that you have CF?
No, I don’t really mention it. However I have been on I.V.s before, and have had to do them here. You can’t really hide that.
Outside of your hour and a half treatment, is having CF on your mind during the day?
Yes, I used to work even longer crazier hours here, and then one year I got double pneumonia and didn’t even know. I thought I just had a cold. I realized I needed to work regular hours, fit in exercise, treatments and rest times.
I feel like I made a life adjustment when I got double pneumonia. I have to deal with this. It’s always on your mind. Even every time I eat, it’s on my mind because I have to take pills to digest my food.
Do the majority of people with CF also work full time?
Lots of people with CF are working full time, but it’s individual. It depends on your genetics and which infections you have had. Some people are getting double lung transplants in their 20s.
Every year the life expectancy goes up. When I was born, the life expectancy was in your 20s, now it’s close to 40. There are people living into their 90s. It depends on your case.
I have moderate CF. It worsens as you get older, but because I’m on this drug, I’ve had significant improvement. Very noticeable improvement.
This drug is to be taken every day, twice a day, and is pretty revolutionary.
Do you think most people with chronic illnesses are afraid to mention it when they apply for jobs? Afraid it might effect if they get hired or not?
It is something CF people worry about a lot. You might not mention it if you were looking to get hired, but at the same time, you can get infections easier, so you would eventually have to tell your employer.
Insurance is a concern as well with CF. I believe in universal health care. If you don’t have insurance coverage with CF, I don’t know what you would do. I’m sure my drugs cost $15,000 a month if not more.
Are you concerned about what might happen with your health 10 years down the road- with work, with family?
The plan is for me to take over the business, but there is always the question of “How will my health be?”
But 10 years ago I never would have thought I would be on this life changing new drug. What else will come out that is life changing? It’s an unpredictable disease. It’s hard.
How do you maintain the balance between being an ambitious professional and maintaining your health?
It’s hard and I’m still learning. I constantly push myself too much, and I notice it and get myself back on track. Health has to be your first focus. You have to be healthy in order to come to work.
Do you ever feel like: “Why is this happening to me?” How do you get through that?
Of course, especially when I get sick. You have to get over it. There is nowhere to go with it. It won’t help you. And at the same time, CF has definitely shaped who I am. I have matured faster. I have had to take on responsibility at a young age.
My disease was mine to handle myself. I’m not overwhelmed as much by other things. I’ve learned to manage and take on challenging things more easily than others might. For example, I take the responsibility of being given the opportunity to work in this family business very seriously. I never want to be a noose around its neck.
And it’s exciting to feel passionate about your work. In general, it’s a great feeling to be so invested in something.
Do you have any advice for other young women starting out in business who may be facing their own hidden challenges?
The biggest key is to believe in yourself. If you are doubting yourself, it shows. You have as much value as any one. You are capable. Feel confident in what you are doing. That’s how you succeed.
We work with hundreds of family businesses, and by far, the biggest challenge is transition to the next generation. It’s kind of ironic considering all the love and support that has got them to this point. But this is the moment of truth. This is when they need to discuss the real issues, the real facts.
Having successfully served as a non-family president of two family businesses, I’ve had a front-row seat on what works and, perhaps more importantly, what doesn’t in the transition of a family business to the next generation.
What attracts me to family businesses is that they are personal, with a family culture and deep sense of legacy. What gets challenging is when the personal nature gets clouded by emotion and affects decision making. Sometimes the family culture breeds favoritism and entitlement. Other times the sense of legacy and long-term view result in complacency and acceptance of mediocrity as the status quo, leading to a slow death. You’ve likely seen the statistics: only 33 percent make it to the second generation, 12 percent to the third, and 4 percent to the fourth.
With 10,000 baby boomers retiring per day, many family businesses are in transition right now and their kids will take over. But in many cases, little has been done to prepare the next generation. A study by Roy Williams and Vic Preisser found the following primary causes of failed transition:
– Breakdown of communication and trust within the family (60 percent of failures)
– Insufficient preparation of next-generation members (25 percent)
– Absence of a clear vision to align family members (12 percent)
– Failure by professional advisers to correctly interpret taxation, governance and wealth preservation issues (less than 3 percent).
Here are six steps that you can take to help ensure you, your family and your business are well-positioned for transition.
1. Start now. It’s never too early to be thinking about succession. Begin by establishing a rationale or philosophy for your ideal scenario. Answers to questions like “What does your model transition look like? What’s the time horizon? At what stage and size is the business?” will begin to inform your pathway. This will evolve over time, depending on where you are in the transition process. As you get closer (within five years), develop a written plan with clear goals and a timetable to guide your decisions and actions.
2. Establish employment guidelines. This will save you from yourself and provide important boundaries for both family members and non-family employees. Bringing the next generation into the business can be loaded with misaligned expectations. You risk making emotional decisions rather than objective ones. Your children may not think the rules apply to them. Likewise, non-family employees aren’t quite sure how to work with or supervise someone with your last name who might be running the company one day. The best way to avoid the pitfalls of family employment is to establish written guidelines outlining clear expectations, standards for employment and prospective ascent through the ranks. This is commonly done with a family constitution or family charter. This should be shared, understood and observed by all family and non-family employees.
3. Prepare the next generation. Don’t assume that family members will develop and learn the business over the natural course of time. Their growth in the business requires focused attention. You’ve worked tirelessly on your business. They haven’t. They haven’t yet learned the hard lessons that you have learned. You need to start integrating them into the process so they learn and understand, not just by being told. Create a development road map for next-generation members that starts with an honest assessment of their preparedness and then purposefully takes them from role-players to managers to leaders. Development plans should be customized for individuals and aligned with their interests and talents.
4. Articulate a clear vision. You probably know where the business is going and what future success looks like, but do others? Probably not, which can result in misunderstandings, disagreements and resentment. Articulating a clear vision with your leadership team and the next generation through a strategic planning process, and ensuring that all family stakeholders thoroughly understand and support it, is critical to family alignment and legacy.
5. Practice conflict and open communication. This is the number one reason why family business succession fails. Family members either avoid conflict (to keep family peace) or allow it to fester and erupt. Constructive communication breaks down, ultimately risking an insurmountable rift. When conflict is handled openly, communication and conflict can be productive, fuel better decision-making and innovation for the business, and clear the air. Regular family meetings and establishing standards for conflict resolution are two effective best practices.
6. Enlist trusted advisers. Surrounding yourself with impartial advisers who have no emotional capital invested in the business is absolutely critical. It’s difficult to uncover solutions to complex and emotionally charged challenges in your business and personal life without a third party. When family and business are intertwined, judgment can be skewed by emotion, rather than objectivity.
As a family business owner, your legacy, the family legacy and the business legacy lie with your ability to implement these six steps. Get started today.
Tom Garrity is managing partner at Compass Point Consulting LLC in Hanover Township, Northampton County. He can be reached at [email protected]
One third-generation, family-owned business has bought another.
Cantelmi’s Forks Hardware is now under new ownership. –
Rocky’s Ace Hardware, based in Springfield, Massachusetts, bought Cantelmi’s Forks Hardware at 1805 Sullivan Trail in Forks Township from Rick Cantelmi, a third-generation business owner.
Rocco Falcone, president and CEO of Rocky’s, said he is a third-generation owner of the company. It has 33 stores in New England. The Forks Township deal marks the company’s first move into Pennsylvania.
Rocky’s bought both the building and the retail store and will continue operate it, he added.
But, Falcone said, the name of the store would change to Rocky’s Ace Hardware, since it is part of the Ace network. He plans to add an exterior sign with the new name.
While he declined to disclose the cost of the acquisition, the 20,000-square-foot-building sold for $2.6 million, according to Northampton County property records. The store has 22 employees, who will remain, Falcone said.
Falcone said he met Cantelmi, also the owner of Cantelmi’s Hardware in South Bethlehem, about a year and a half ago. Falcone said Cantelmi told him it was too much to manage both stores.
“He worked very closely with us to ensure we would continue it,” Falcone said. “It was important for him and for us to maintain the good in the store and to improve it.”
Falcone said he started thinking about acquiring the business and, last year, began having his employees “mystery-shop” there to get a sense of the shop’s feel. He noted the store was a little light on inventory but attracted a “great community.”
“Right now we are adding more inventory and in the next six months we will go through every department and update and refresh the product selection,” Falcone said.
Aside from hardware, the store includes departments in paint, lawn and garden products.
Falcone declined to provide revenue.
“It’s important for him to keep the business going,” Falcone said.
The Forks Township store opened in 2006, Cantelmi said.
“Things have changed in the marketplace and I had to do what I had to do,” Cantelmi said. “It was time for me to move on and he made an offer I couldn’t refuse. I had been looking at the possibility of selling it and he was looking to move into the Pennsylvania market. I appreciate all the support that was given to me by the Forks Township community.”
Falcone said Cantelmi was interested in cutting back and maintaining focus on the Bethlehem store, which has been operating for nearly 100 years. Cantelmi said he and his son, Patrick, will continue to own and operate the Bethlehem store.
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