Boomers Leave Their Mark on the Next Generation
Creating a family legacy takes purpose and perseverance. Passing ideas and values, along with estates and wealth just don’t come about through happenstance. Careful planning and intentional living are two key qualifiers in transitioning a family from one generation to the next, especially when the family not only lives together but works together.
According to the September, 2003 “Family Business Review”, family-owned businesses comprise 80 to 90 percent of all businesses in North America, employing 62 percent of the U.S. workforce, and creating 78 percent of all new jobs. As businesses move from generation to generation, the likelihood of survival decreases exponentially. On average, only 30 percent of family-owned businesses proceed to the second generation. As the third generation steps into the successor role, the number decreases to 12 percent, leaving only 3 percent of family businesses operating at the fourth generation and beyond.
There are many challenges that face a family-owned business. Tough economic times have impacted many companies, prolonging retirement for boomers and leaving next of kin waiting in the wings to assume mom or pop’s role. In an American Family Business Survey conducted by the Raymond Institute, 19 percent of family business participants have not yet completed estate planning other than writing a will, and only 37 percent have written a strategic plan.
Boomers must understand and know that a successful transition depends upon purposeful mentoring and equipping of future generations, clear company goals, a definitive succession plan, along with a willingness to maintain quintessential values while introducing innovative strategies to compete in an ever-changing market. A proper preparation to hand off the company reigns is estimated to take 10 years on average. So the question begs itself, “What type of family legacy have you established and how will you leave it behind?”
Third Generation: Willkomm Companies, Racine, WI
In 1946, “Shorty” Willkomm started driving a wholesale gasoline and fuel route for Mobil Oil Co. His son Jerry could often be found giving dad a helping hand. In the early 70’s, “Shorty” became very ill and risked losing everything if one of his 12 children didn’t step up to the plate and run the business for awhile. Jerry quit his job at the local grocery store in order to assist dad. Once “Shorty” recuperated, he told his son, “There’s enough for both of us,” and the two became partners.
Willkomm Companies was formed in 1979 when Mobil no longer wanted any distributorships. Given the opportunity, Jerry borrowed $375,000 at 21 percent interest and put his and his dad’s house up for collateral. The third generation, Michael and Jimmy, joined the team beginning in 1988 and 1991 respectively.
The family business expanded throughout the years. The Willkomms own and operate seven corporations, including four retail Mobil locations and a transportation company, own nine semi-trucks and supply 17 other stations while selling 50 million gallons of gasoline a year.
After Michael was is the business for ten years and Jimmy for seven, Jerry asked his sons a critical question, “Is this what you want to do? If so, we’ll make plans to transfer the assets to you.” Michael explains that his dad wanted to make sure he and his brother were capable of managing the many facets of Willkomm Companies before handing the reigns over. Jerry has slowly stepped away from the day-to-day operations, acting as a consultant. The family is in the final stage of transferring stocks.
“My dad taught me the harder I work the luckier I get,” said Michael, recalling how his dad worked 80 to 100 hours a week. “He never lacked ambition.” When speaking of passing down the company to his children one day, Michael sees the greatest obstacle to overcome as ambition. He knows the kids have intelligence and they can learn people skills, but wonders how they will understand what it takes. “They’ve never gone to bed without food or an extra coat. My parents passed some of it on to us. We were poor but didn’t know it. My kids know they have everything they need. I honestly think they are handicapped.”
Jerry was cognizant that he was “building a future for them.” “Shorty” taught Jerry to never turn from the Mobil company motto, “You don’t ever have to be ashamed to go to someone’s door. Buy a good product and it’s easy to sell. Provide the service and you never have to worry.”
“I’ve learned through the years and I’ve passed on as much as I can,” said Jerry. The Willkomm family has weathered the first oil embargo, environmentalists, recessions and rising fuel prices. “If you worry about getting rich, you’ll never do it. If you give customer service, you’ll never worry about it. The ones that survive are those who give a good product at a fair price. The livelihood will be the benefit or fruits of your work.”
Fifth Generation: Lucy Appliances, Zion, IL
Celebrating 75 years of business is an accomplishment not many can claim. Lucy Appliances opened their doors during the depression in 1935 as a general feed store in a small community which had been built as a religious utopia. It is these very ideals which the company bases their continued success on.
Forth generation owner, Dan Lucy said, “Nothing we have is ours. I give five generations of good business to the Lord. He has let us in there. I pray that we will use it for His glory. That’s why I think it’s gone five generations. Christian attitude keeps tempers from flaring. If I had to deal with worldly attitudes I couldn’t do it. We’re all grounded in the same faith and that shadows on the business. That’s the thing I would want to pass down.”
The Lucy brothers, Dean, Dave, and Dan, are young boomers. Their father, Dwayne, is just beginning to step back from the business. He is 76 years and began handing off company shares to the boys ten years ago. The fifth generation, Dustin Lucy at age 25, began working for his dad and uncles after stepping away from the business. He currently is the only fifth generation employee. His four cousins are either in college or high school and have not yet expressed a desire to return the family business.
The Lucys face the continuing challenge of big box stores popping up on all of the major corners. Other family appliance stores seem to expand and grow. Lucy Appliances remains one of the largest stand alone appliance stores in the State of Illinois. “I don’t want to grow the store. I don’t want the headaches. There are some things which are more important. Others have lost the personal touch. I can almost live off of the customers they lose. I want to be able to watch what I am doing. Control and customer satisfaction,” said Dan.
Small businesses combat the impression of being more expensive. The Lucys pride themselves in the ability to meet or beat competitors’ cost and deliver their product before any of the big chains. It’s part of why they believe people keep coming back. The business has been able to endure tough economic times. Dustin believes his family has kept a balance, “Whether we’re doing good or bad, we can service both ends. If we don’t service the product, then we’re no different than anyone else.”
There is a reality that the brothers have to make plans for the future of their business. They hope it will go another 75 years. Dustin is grateful for the family aspect to business, but understands the necessity for the business aspect of the family, hoping the generations before him will lay out a clear strategic plan for the future. Dan notes that it’s difficult to plan the transfer of wealth when “We’ll probably work until we’re 90. What else are you going to do?”
Legacies That Live On
The oldest family owned business operating in America is Zildgian Cymbal Company of Massachusetts, established in 1623. Seventeen companies were founded before 1776. In Family Business Magazine’s “The Oldest Family Businesses in America” list, over one-fourth of the oldest 100 businesses are engaged in farming, agriculture, horticulture or ranching. Families owning and operating funeral homes or memorial businesses equates to 18 percent. America’s oldest companies are scattered across 31 states with 54 companies calling the original 13 colonies home.
Author Chris Shogren-Thompson is a four-term elected School Board member, currently serving as Vice President of the Winthrop Harbor School District. She has volunteered full-time for the past 16 years , working with children and women in her community. Shogren-Thompson resumes her career as a contributing writer to www.watchboom.com and www.REELChicago.com.
