UVM's Family Business Initiative

Vermont Business Magazine, Aug 01, 2006 by Brush, Cassandra

Family businesses face issues not seen in other companies. Whether or not market the family as part of a company brand, generational transitions, and communication with families are just some of the factors specific to family businesses. Some of Vermont's oldest companies are still family run. One might conclude that there's something about a family running a business that can make it successful.

That's perhaps why the University of Vermont sponsors the Vermont Family Business Initiative, a 10-year old support mechanism in place for Vermonts heritage of family owned and run companies.

"Our smallest business is two employees, a father and a daughter," said Daniel Van Der Wet, VFBI Director. "Our members range in size all the way up to Westaff, a national company that owns a local franchise with 20 full time and 500 part time employees."

VFBI offers forums and small groups in which owners and soon-to-be successors of family businesses share information and strategies. It also offers expertise from its four partners: Gallagher Flynn, the Burlington-based CPA firm that provides financial expertise and financial planning to VFBI's 25 members; Gravel and Shea for estate planning; Northfield Savings Bank which provides banking and investment with family business; and Orchard Point Associates, which helps with developing boards of advisers or directors, and business relationships in general.

"Most of the businesses already have accountants and bankers," Van Der Vliet said, "These provide a third party perspective, so when (business owners) go back and talk with their providers, they know they are getting good advice and a second opinion from a confidential source."

Some of the forums VFBI offers include topics such as: Marketing the Family Brand, and the "Sandwich Effect" in which people aged 20 to 40 often inherit family businesses while also having to care for an older generation and raise their own families.

But the meat of Fib's work comes through its small groups, one for CEO's and one for "the next generation." Groups average about five participants, Van Der Vliet said, and provide an atmosphere in which business owners or future owners can share information, stories, and learn from each other.

Van Der Vliet explained that the CEO group is for those at the ownership level, either the owner or primary operator of the business. Three of those groups have formed. The "next generation" group is for those likely to be the next generation of owners, he said. In some cases it's the son or daughter, or a key employee. This group looks at when to seek one's own professional advice, how to begin managing a business, and matching up education with the business.

"There's comfort in numbers," Van Der Wet said. "While each business is unique, other people are in similar situations. There's much to be learned by fostering these relationships."

Gregg Haskin, president and CEO of Waitsfield & Champlain Valley Telecom has been heading up the family-owned company for more than a year. He has found VFBI's CEO group invaluable.

"It's funny to see other companies are experiencing the same triumphs and tribulations that we are. It's great to see that, and have the camaraderie and learn about other industries," he said. "We have two woodworkers, a beer manufacturer, a cheese and butter manufacturer, the telecommunications industry, and a company in the microbiological industry. It's very diverse."

While some family businesses need to come up with "exit strategies" when there is no next generation to pass it on to, Haskin doesn't foresee that need for himself.

"We have such a long legacy here, selling the company is just not in the cards. I have a great responsibility here to keep 100 people employed, and to keep the company here. It's still profitable, it's a family atmosphere. I don't want to jeopardize it in anyway," Haskin said.

So he tapped into VFBI's resources "for learning options." He takes advantage of forums and expertise from VFBI's partners, but Haskin keeps coming back to how much the small, tight-knit CEO group has helped him develop as the leader of his own company.

"It truly is engaging," he said. "It keeps your interest. Plus, I've been able to call upon the expertise in my employees, for example, I have two girls who know quite a bit about human resources, and I have been able to use them with another company dealing with the same issues we've dealt with. We were able to give them some guidance. It's a sharing of expertise among six people, and its working." For more information about VFBI, contact Van Der Vliet at 1-888-222-3413 or email daniel.vdv@uvm.edu.