Passing the torch can be a delicate move for family-owned businesses
Two representatives of successful family-owned businesses took center stage this month as part of workshop on the challenges of transitioning a business to the next generation.
Paula Janssen of Janssen’s Market in Greenville and Andy Hartstein of the Insurance Market in Sussex County addressed a crowd of 30 people at Harry’s Savoy Grill to offer personal insight into the difficult conversations and decisions necessitated by a business transition.
Janssen returned to Delaware after a career in software development to become a third voting partner at her family’s supermarket, a mainstay of Greenville since 1952. She went to business school at Wharton, and made sure she had something to bring to the table.
“I could see ways to grow it,” said Janssen, who said she wanted to infuse the business with a level of professionalism that included standards and practices that would grow the business while freeing her parents the day-to-day details of management. She’s poised to take the reins from her parents at the end of this year.
But the transition meant honest, even difficult conversations about everything from family members who are not partners or involved in the daily operations, to retirement and estate planning for her folks.
Andy Hartstein is a third-generation independent insurance agent in a business started by his grandfather in 1975. Currently owned and operated by his father and uncle, the business boasts multiple offices, and Hartstein’s brother and cousin work full time at the agency with the intention of sharing ownership when their fathers retire.
He said the agency’s internal conversations are just beginning as the family hammers out a succession plan that’s fair to both generations. But he said his father and uncle’s willingness to give him a “seat at the table” before he’d earned the right to weigh in on business issues gave him a glimpse into the inner workings of the business and have groomed him for eventual ownership.
According to Margo Reign, business advisor with the SBDC 37,000 Delaware business owners have the potential of retiring in the next ten to 15 years, a figure that will dictate challenges as owners contemplate their succession and retirement strategies. She said she suggests conversations about succession plans happen early and often, and an objective third party could help ensure that emotional topics result in concrete, equitable decisions.
“In many cases their businesses define who they are,” said Reign. “Letting go is extremely hard.”
The Delaware Business Times family business transition seminar was produced by the Small Business Development Center and presented by M&T Bank/Wilmington Trust