:: Home

  :: Nelson Davis
     Small Business
     Blog

  :: Air Times &

    Stations

  :: Show Schedule

  :: Secrets of
     Success
     Streaming Video

  :: Business Events,        Workshops, &
     Seminars

  :: Entrepreneurs
     Digest

  :: Small Business
     Q&A

  :: Small Business
     Tool Box

  :: Entrepreneur
     Confessions

  :: How To Get
     On The Show

  :: About
     Nelson Davis
     Television
     Productions

  :: Want to Advertise 

     on Making It!?

  :: Order Making It!  

     DVDs

Let the

Making It! Digest equip & guide you down a successful business path

Catch the latest Business Events before they pass you by

Inspirational Articles from Making It!

Get the motivational push you need to thrive in the business world now!

Video Streaming

Video Streaming: 

Past episodes of Entrepreneurs living the American Dream!

 


 

 

The Making It! Business Blog
by Nelson Davis

 

Tuesday, November 10, 2009
Email to a FriendSend to a friend 

 
    
THIS EDITION: THINK FAMILY BUSINESS

In the past several weeks my very curious mind found a connection between several items in the news that turned my thoughts to family owned businesses. For example, Donald Trump’s attractive and seemingly very bright daughter, Ivanka, caught my attention because not only did she get married recently, she is also an executive in the family business. Warren Buffet’s Berkshire Hathaway bought Burlington Northern Santa Fe railway for $26 billion making a long term bet that railroads will be important to America’s future. It is interesting to me that one of the country’s richest entrepreneurs has three children who are not working in his business. And because I’m a perpetual student of wine appreciation, I revisited the story behind the sale of Sebastiani Winery by the children of the founder.

The thread among these events for me is the lessons we should all take from what family businesses really mean and their place in the prosperity paradigm for America.  John Haskell, a business consultant friend of mine, has often said the he works with clients to make their family business systems so strong that the enterprise could be run by an idiot because someday it will be. In the earliest days of producing the “Making It!” TV show, I learned that people who endure the heavy lifting of building a family business have two primary thoughts. First, they simply want to provide a nice life for their family today, and secondly, they harbor a quiet dream that one or more of the children will take the business over and keep it going through several generations. Of course in the early years of our country, most business was agricultural and farmers really needed the family to pitch in.

The top issue for a family business is generational transition. Only about one third of all family businesses successfully make the transition from the first to the second generation. That’s because the kids either aren't interested in running the business or figure they are much smarter than dad or mom, and they make drastic changes when they take the helm. Also, I feel that many small business owners fail to really establish and maintain a consistent value system and big picture business philosophy. The Ford Motor Company is a very unusual example in that there are still Ford family members involved with the company 106 years after its founding in 1903!

I’m thrilled that the “Sage of Omaha,” Warren Buffett, is once again showing his ability to see around corners with the Burlington Northern Santa Fe railway purchase by investing in a business that seems to belong to decades past. You know that he is taking an unconventional view when you notice that he’s buying something that probably won’t fully pay off until after he’s lying under a headstone! That long view thinking has become much too rare in American business where quarterly earnings reports have become the hymn book for most CEOs. It is easy for most of us to assume that Susan, Howard, and Peter, the three children of one of the planet’s richest people, would run to work in the family business, but instead they all have other professional lives. And published reports tell us that they aren’t expected to inherit most of their father’s wealth either.

A trend that seems to be emerging is the increasing number of family businesses that are being passed down to daughters. Let’s hear it for Ms. Trump. During the past five years, woman-owned family businesses have increased by 37%. There is evidence indicating that women-owned family businesses are better prepared for transition scenarios and have higher success rates than businesses controlled by their male counterparts. Maybe Mr. Trump’s otherworldly hairdo covers more thought power than we expected.

The Sebastiani Winery saga highlights the soap opera aspects of a multigenerational family business. In 1897, Italian immigrant Samuele Sebastiani arrived in Sonoma California and founded the winery in 1904. In 1936, August Sebastiani, Samuele's son, married Sylvia Scarafoni, and their marriage became an enduring family legacy. The couple increased the winery’s output a hundredfold over four decades. August died in 1980, and his wife, Sylvia, became the matriarch of one of America’s most prominent wine families. She fired elder son, Sam Sebastiani, in 1986 because she thought he was mismanaging the winery, and replaced him with younger son, Don Sebastiani. Later, their daughter, Mary Ann Sebastiani Cuneo, is named president and chief executive officer. Her husband, Richard Cuneo, became chairman of the board. Sylvia passed away in 2003 at age 87, and in 2008, the three children put aside their ongoing differences long enough to cash a check for about $50 million and waved goodbye bye to the winery. Three generations is a long run for a family owned and managed business.

Sometimes I wish that William Shakespeare had set one of his stories in a family owned business! Dysfunction and money make a pretty incendiary mix worthy of the best the bard had to offer. If you have a dream of seeing Suzy or Billy take over your business and preserving the family name and legacy, you’d better be prepared for some major drama.

I believe that well run family businesses set a desirable template for how we should be approaching many things in America. We really do have to look beyond short-term gimmicks to real investments in technology, infrastructure, and education, the stuff that can grow economies and generate substantial jobs. These are the investments that will bequeath our grandchildren, the tools and knowledge that address the challenge of how they can live better lives. You see, family business is really much bigger than any one single family.

 

Let me know your thoughts by e-mail: nelson@makingittv.com

   POST A COMMENT

Thank you for your input. All comments are moderated and will be posted after approval by the moderator.

Name
Title
Organization
E-mail
URL

          Comments:


      

        FEEDBACK

Send us your thoughts on this editions topic. Just click the link below.

SEND EMAIL

 
       SUBSCRIBE

Don't miss a single edition.

CLICK HERE

 
    

RECENT  

ARCHIVES

 

More...

  LINKS

Your Success Network

 

Motivation and Strategies for Entrepreneurs

 

Email a request to get your website featured here!

  
   
 
 
 

This site created and hosted by Light Space and Time,llc
Copyright (c) 2003-2006 Nelson Davis Productions