Family-owned businesses play vital role in local, state, and national economy

Business columnist Phil Hardwick points out that although Mississippi actively recruits out-of-state investment, local family-owned businesses contribute substantially to the state’s economy.

An economic developer would probably tell you that the ideal business is one that is headquartered in the local community, sells a high-value product or service worldwide and then deposits receipts in a locally-owned bank. A community developer might say that the ideal business is one that meets the previous specifications but is owned by someone who grew up locally and gives a lot back to the community. And then there are those businesses that meet all the previous specifications and then some. They are family-owned businesses.

To some economic and community developers, that last characteristic seems to be getting more difficult to find. Nevertheless, there are still some around, and more gaining ground in the business world every day.

After World War II, a generation of business founders took advantage of a growing population and increasing demand for all types of goods and services. They built companies that were at the top of the business ladder in their communities. They invested heavily in their communities. In the later part of the twentieth century, things began to change. Economic developers and others noticed that it became more difficult to raise money for projects and that the business makeup of the community had changed. And then the lamentations set in. What had happened is that members of that generation, particularly those who did not have children interested in commerce, sold their businesses as they grew older. The time was right. Globalization, mature markets, and tougher competition brought in an age of mergers and acquisitions in which it was easier to grow a company by buying another company than starting anew. Top business schools even offered courses in Mergers and Acquisitions. I recall attending a venture capital presentation several years ago when all five entrepreneurs seeking start-up capital said their goals were to create a business and sell it. But I digress. 

What about the future?  It appears that family-owned businesses are alive and well. And they are getting recognition and success as never before.

Many business schools have begun offering executive courses in family-run businesses. These courses cover things like identifying and addressing the challenges that come with family-owned and family-managed businesses, maximizing the family business’s strengths, and minimizing its weaknesses, and developing effective strategies to reach common goals, address conflicts, and plan for a family’s future. One such program points out that having an outside facilitator to work with the family to set goals and strategies, resolve disputes and serve as a listening coach can add immensely to the success of a family-run business. Another aspect of these programs is that they focus on succession planning, something that often causes friction in families.

Whatever the case, family-owned businesses are an important part of communities, especially those undergoing revitalization. Downtown programs in successful communities often describe their locales as being filled with family-owned businesses. Indeed, some locales are using the term “family-owned businesses” in their marketing strategies. Mississippi has an ample share of such communities. 

Successful family-owned businesses can be found nationally and in Mississippi. Nationally, the third generation of Truett Cathy carries on the Chick-fil-A business. The grandsons of Hallmark Cards founder Joyce Clyde now run the company. Although not a “family-owned” business, it is worth noting that the current CEO and Chairman of Comcast is Brian L. Roberts, son of founder Ralph J. Roberts, who started the company in 1963 in Tupelo.

Mississippi is a Mecca for successful family-owned businesses. Consider the following:

• Father Bill Cooley and daughter Toni founded and own several businesses, including Systems Electro Coating, LLC, – a tier-one supplier to Nissan and Toyota. 

• Taylor Machine Works and the Taylor group of companies in Louisville, founded by W.A. Taylor in 1927, is now led by third-generation family member, William A. “Lex” Taylor III.

• Since 1964, Mary Mahoney’s Old French House in Biloxi has been serving up thousands of diners. Son Bobby continues the family-run restaurant that in addition to great food is also known as the place where celebrities have dined.

• Since 1907, Williams Brothers has been a family-owned and operated general store found in the heart of Philadelphia, Mississippi. It’s a family business that opened in 1907 by Sid Williams’ grandparents. Sid and his cousin Jane are the 3rd generation to run the store, but most of the family, at some point, has spent time here.

The list could go on, but you get the picture. Although Mississippi actively recruits out-of-state investment, local family-owned businesses contribute substantially to the state’s economy.

So, is there a secret to success for family-owned businesses?  Family Business magazine pondered that question and came up with the following factors:

1. Stay small.
2. Don’t go public.
3. Avoid big cities.
4. Keep it in the family.
5. Choose a business that won’t go out of style.
6. Be creative.
7. Persist.

Finally, many business, government, and community leaders are recognized and celebrated in the Annual Top 50 in Mississippi Awards. This year’s awardees will be announced in a few weeks. I suspect a few of them will be involved with family-owned businesses.