Most people hear the phrase “family owned business” and have negative associations or reactions. Fears of zero work-life balance, nepotism, stability of operations, perceived career growth stagnation and ruined family holidays. I think the most real and common fear is operational stability and concerns of a future generation keeping the family business afloat.
Most studies about multigenerational family owned businesses affirm that only about 13% of successful family businesses last through three generations. Even before getting to three generations, typically less than two-thirds of family owned business survive the transition to a second generation. Given all this headwind; why would any sane and rational human want to be part of a family business or even aspire to be an entrepreneur?
Every business owner has a different answer for stepping up to the challenges of being in business. My reasons are personal and unique to me. In 2012 I left an eight-year public accounting career in San Francisco at Ernst & Young to join the team and family business at Davidson & Associates Insurance headquartered in the world-famous Vancouver, Wash.
Working in an extravagant fully staffed 600-person office, serving Fortune 500 clientele, learning from the best and brightest accounting partners and first-class travel was a great way to get started with a career and experience the “corporate life.” However, the long, crowded bus commute became harder, Sunday fights for Monday meetings and spending birthdays and holidays away from home mirrored “walking the plank” and caused me to evaluate what I was doing with my life and profession. I had already given eight years of my life to a large corporation, but would I gamble another 25? I desired a lifestyle where I knew my neighbors and was active in my local community. I view time, treasures and talents as tools for bettering a local community and not keeping personal resources locked up in an office or a bank account.
The answer to my dilemma about my future was to take the biggest risk of my personal and professional career and join my family’s business in July of 2012. I started with only an insurance license and fear about being the son of the owner. I knew nothing about advising on insurance risks or caring for a person or business during a real-life claim. I only knew three things when I went to work on my first day – (1) I had the benefit of learning and working at a successful community-focused insurance firm with a proven reputation and successful track record; (2) if after six months things were not working out I would be fired by my father and no one else in the firm and (3) the average American spends 90,000 hours at work over their life time and I was getting the luxury of spending that amount of time with my father.
Fast forward to 2020, I am now a part of the ownership at Davidson & Associates and have the benefit of working with an amazing team. The team includes my business partner that is not my blood relative but is like family. I still get the pleasure of working with my father and sometimes, we even carpool. I also have a family of my own with a beautiful and professionally successful wife as well as a happy and healthy 6-month-old son. The risk paid off and I am thankful our family business has continued to thrive with the help of this community.
When thinking about joining or starting a family business, I recommend proceeding with caution but remembering the risk is worth the gain. Not every day will be free of family conflict or blending of work-life conversations. No meals are void of business discussion or brainstorming ways of being a better partner for community nonprofits. Work might always be a four-letter word but a “family” knows how to offer support during the tough times and celebrate success and business milestones.
I further believe that family owned businesses are enhanced and strengthened by expanding the view of “family.” A close friend or peer may not share a last name but when aligned in business goals and complimentary experience, they make the best addition to a management team. I have the benefit of experiencing an arranged “business marriage” with my business partner Tony Johnson. While he is not a blood relative it feels like he is family and his insights, experience and lack of blood relation add significant value to the family business.
While some may fear family owned business and shy away from the risk, I believe the future opportunity for successful and closely held businesses could never be stronger. Our community knows how to support and provide for a small business. Family owned businesses act as the backbone of a community by proving livable wages and employment for all skill levels. Family owned businesses allow downtowns to thrive and grow. Big corporations cannot match the pride of ownership shown by a small business with a storefront that welcomes the whole community. I am proud to be part of a family business and have our world headquarters in a vibrant community like the Vancouver Metro Area.