Family Business

James Kocsi
District Director, U.S. Small Business Administration (SBA) – New Jersey District Office
James says the first three years of any business is when it is most vulnerable for failure. This includes the first three years after a family business has changed management due to succession planning, death, etc. James also recognizes the difficulties families and minorities face when securing capital. Investors want to supply capital to businesses with a proven track record, and may often view family-owned business as volatile. Challenges facing family businesses today are succession planning and dealing with new technology.

The Small Business Administration gives $2.5 million to the New Jersey Small Business Development Corporation to run state-wide programs that are designed to assist small and family businesses. In addition to providing the funding for these centers, the SBA is the primary agency to assist business owners in attaining loans from a local bank. The SBA will guarantee 50% to 85% of a loan requested by qualifying applicants. The SBA also provides an array of services to assist business owners including a mentoring program run by retired former executives (SCORE), a resource center specifically designed to assist female entrepreneurs (Women’s Business Center), as well as its own loan programs that often assist family businesses during a time of transition or growth.

James Barrood
Director, The Rothman Institute at Fairleigh Dickenson University
Jim brings an academic as well as personal perspective to the panel. Since 1940, his family has owned the Barood Agency that provides real estate, travel agency, and insurance broker services to the Central Jersey area. Jim advises that these are the top three issues that face small and family owned businesses:

• Succession Planning - it needs to start early and become a part of the business plan.
• Managing Conflicts and Communication - outside consultants, including advisory boards aid in creating a fair and balanced sounding board.
• Estate Planning and Tax Issues - without proper planning and the distribution of assets to dependents via trust funds prior to the owner's death, the taxes due may exceed what the business is worth.

As has been true since its founding in 1989, the mission of the Rothman Institute for Entrepreneurial Studies on the Madison campus is to foster, support, teach, and study entrepreneurship in both the academic and business communities. Through its academic and outreach programs, the Institute has served thousands of students, aspiring entrepreneurs, small business owners and family business owners and employees.

Jean Griffin
Vice President Wash's Catering Service
Wash's (short for the family name Washington) Catering began as a sandwich shop on Kentucky Avenue in Atlantic City in 1935. Jean's father and uncle were the original owners. Jean advises that the business has always been a "family affair" and they were all "raised in it." Through a number of expansions, including a restaurant and most recently a catering hall that seats 300, Jean advises that the business has brought her family closer together. Phrases like "you finish arguing and go back to working," and "you can't quit and nobody can fire you," suggest the strong bond this family shares.

But it's not to have just family, as half of the employees are not related to the Washingtons. Many of these workers have been there for over 15 years and their families (siblings, children, nieces, etc.) work there too. Jean refers to Wash's as an "African-American "Cheers"- a place where everyone knows your name." The fourth generation of Washingtons continues to operate the business. Jean, a retired professor of Social Psychology from the Univ. of Massachusetts, says that growing the business has not gone without hardship. They were turned down numerous times when they applied for a $600,000 loan to expand. This denial, coupled with a member of the family's health problems, was difficult for the business. The Washingtons were finally approved for an Urban Enterprise Zone (UEZ) which was later refinanced through Sun Bank.

Arthur Z. Silver
Director of Marketing for the Rohrer Ctr. For Mgmt. & Entrepreneurship (CME) Rutgers-Camden
Art is an entrepreneur, seasoned businessman, and business consultant who also ran his own general merchandise brokerage firm from 1974 through 1994. He currently serves as the Director of Marketing for the Rohrer Center for Management & Entrepreneurship (CME) at Rutgers-Camden. Art knows first hand about succession and training family members in other locations to assume responsibilities upon their return. His daughter worked for a non-competitor in another part of the country, who trained her. After the training was complete she returned. Art advises that there are two types of skill sets needed to successfully run a family business:

• "Soft issues" include: conflict resolution and communication skills, selecting the appropriate person for the job, and adopting management styles that foster cooperation.
• "Hard issues" include: accessing capital, estate planning and taxes, succession, and avoiding litigation by having an employee handbook that clearly states all rules and regulations in accordance with acceptable employment law practices.