BY: Marc Heller
Erica Garlock studied business at Clarkson University, but she says classrooms didn’t fully prepare her for the next big goal staring her in the face: taking on the family’s custom-made door business in Hammond.
“Transition planning is something that’s spoken about very little, said Garlock, 33, who runs Vintage Doors LLC with her parents and her 35-year-old brother. “You’re kind of left to figure out everything on your own.”
All over the region, family businesses are contemplating their future and whether — and how — to shift control to the next generation. Millennials are gradually taking the reins in business ranging from retail to farming, sometimes with a minimum of formal training in how to do that.
Family business owners and professionals who work with them say the challenges are emotional as well as practical or financial but that the younger generations brings opportunities, too, embracing new technology and ways to think about managing transactions.
At Vintage Doors, which sells handcrafted wood doors made in Northern New York, Garlock said the family splits responsibilities for daily management, each taking on certain departments — she handles sales and marketing, her mother Rosemary the shipping and accounting. Howard Demick, her father, started the company in 1990. The shared work has been going on for more than a decade, she said, and the longterm goal is for her and her brother Ryan to keep Vintage Doors going after her parents retire.
As with many businesses mapping out their future, details remain to be worked out and will require sometimes difficult conversations about passing the efforts from one generation to the next.
“We need to know how to work with two key individuals not in place,” said Garlock, who comes from a farming family in St. Lawrence County. “I think any conversation’s tough for people, to have to figure that out, and get everyone to sit and talk about it.”
She added, “I think it’s more emotion than anything. Also, we live in an area where theres's not a lot of others to talk to about it, so you’re left to yourself.”
The emotional side of passing businesses from one generation to the next can have a real business impact, according to the AARP. In a report on family business transitions, the organization advised making good relations a high priority.
“Every family has a hierarchical order, and not respecting this order inside the company will cause friction. If someone feels they are being disrespected or not being heard, it’s a recipe for resentment and conflict,” the AARP said.
Younger family members should be given a management role before any shift in ownership, the report said, so they can train in place. Documents such as wills and plans for how shares of stock are to be transferred are critical. Another must: a detailed plan for what role the parents will play after the business is transferred, whether that’s advisory or otherwise.
Some north country organizations are working to help families with transition plans. The Adirondack North Country Association is launching a North Country Center for Businesses in Transition, which will connect local chambers of commerce and other organizations in an effort to give family businesses more information on how to manage the change. A recent study showed that as many as 16,000 family-run businesses in ANCA’s 14-county region are nearing the owners’ retirement, said Danielle Delaini, the group’s regional advocacy project assistant.
Read the full article in NNY Business.