Clean Transitions in Family Business

Family owned businesses continue to be the backbone or our economy. They range from small businesses to large corporations, employing 60% of the population. Family owned businesses are one of the fastest growing sectors of the economy responsible for creating 78% all jobs in our country. Unfortunately, the odds are against a family owned business succeeding after a generational transition. Most often the next generation isn’t interested in carrying on. Sometimes, the new generation will make drastic changes in the business that the employees and or customers aren’t willing to accept. Other times the new generation just doesn’t possess the value system or business philosophy the previous generation had. Whatever the reason, statistically, only 33% of all businesses successfully make the transition to the second generation, and only 10% make it to the third.

Best Cleaners, has survived 2 generational transitions. Shawn McCann is the third generation to run the organization. In 1954 William J. McCann, Jr a WWII Veteran opened the first Best Cleaners in Middletown Connecticut. Today they have 11 locations.

Second Generation
The second generation brothers Bill & Tim were groomed to take over the business using their good sense and work ethic learned and grew the business in a grassroots fashion, heavily involved in the day to day operations. They led by being present. It was sink or swim. Later Bill bought out Brother Tim’s shares and ran the business with his wife Susan.

Third Generation
Growing up, Shawn didn’t work in the stores; he was usually given the task of painting or mowing the lawn. After he graduated from college, his parents Bill and Sue McCann encouraged him to work elsewhere to establish himself and learn what it meant to work under other management. When he finally joined the business, he initially spent his time learning every aspect of every job. He didn’t spend a long time at each position, just long enough to understand each position of the company. When Shawn finally joined the business, the staff was a bit nervous about the new management, but Shawn made himself visible enough to ease their concerns.

Shawn chose to carry on the tradition of Best Cleaners because he took pride in what the previous generations had accomplished. He educated himself and knew he had the skills to take the business into the next generation. Under Bill, Best Cleaners grew to 10 locations, offering same day service, and home delivery to its customers. Best Cleaners was also the first in Connecticut to provide GreenEarth (environmentally friendly cleaning system). Since Shawn has come into the business, they have added a new location and created more efficient processes. Keeping current, reading Trade Publications and networking with Trade group members has allowed him to stay ahead of the curve. Everyone always remembers the first in the industry.

Successes and Challenges
Best Cleaners greatest success has been its ability to secure jobs for their 140 employees some have been with the company for 25 years. Employees are given the tools to create an experience for our customers. “Customers are guaranteed a quality product; otherwise the garment is replaced at full value. Fortunately, this doesn’t happen very often, but nothing is perfect. This guarantee gives our employees the tools to make the customer happy, and concentrate on quality.”


On the other hand, their greatest challenges have been keeping their fixed costs low. They are constantly striving to bring in more efficient technologies to save on their fixed costs. Another challenge is the cost of cleaning vs. buying new. Innovation, convenience and customer service keeps the customers coming back. Home delivery, express service (in by 11:00, out by 4:00), and converting to an environmentally safe solvent (GreenEarth) are some of the reasons customers choose Best Cleaners.

Best Cleaners is staying in the game and part of the 10% that survives the 3rd generational transition. Give the next generation the experiences, knowledge, and make them part of the culture before promoting them to CEO. When the next generation is groomed in this fashion the odds of success increase.

Family Owned Grocery Chain with Big Ideas and Values

December 22, 2007, I am doing some last minute Christmas shopping. I run into Highland Park Market for Jones Soda, to give as a special treat for the children. The store is bustling with patrons preparing for the upcoming holiday. Once inside I cannot find what I am looking for. I stop to ask a busy clerk for help. She stops what she is doing, smiles, looks me in the eye and proceeds to show me where to find Jones Soda. She pointed me in the right direction, but it wasn’t exactly what I had in mind. I ask the busy young man at the pizza counter. He also stopped what he was doing to assist me. I arrive at the register to find more friendly faces, since the soda only came in singles the clerk ran to find a box with dividers so I wouldn’t break any bottles. As I attempt to leave I am stopped by another clerk who informs me that it is slippery outside and he would help me to the car. All that service for $11.10 sale.

I was so impressed by my experience I phoned Tim Devanney to compliment him. Tim, who has spent his life working with his family, invited me in to tell me their story.

History
Since 1953, the Devanney family has owned and operated Highland Park Market. In 1953, people patronized their neighborhood stores. However, a lot has changed since 1953. One of those changes is the big box grocery store and shopping clubs.

How does a small grocery chain stay competitive in today’s market? The answer is quite simple; “give them what they want”, high quality, good customer service, and convenience.

Quality
Customers that shop at Highland Park Market are not shopping for the best price. They are shopping for their high quality meats, fish, and produce. They are committed to being the “Rolls Royce” of grocery stores, and are putting their money where their mouth is. Tim and his staff don’t take the vendor’s word for it. All the fish, meats, for their award winning deli, butcher shop and fish department are tasted and tested. The Devanney family doesn’t skimp on staff either. There are 2 chefs in the deli and pastry chefs in the bakery.

Customer Service
Earlier, I mentioned the level of service I received as a patron. As a business owner I understand that the attitude of the employees typically reflects the leadership in an organization. Each employee receives a 4 hour orientation where they learn how to work with the customers, gain product knowledge and enjoy a sampling of the product. All this enables them to best serve the customers. The training doesn’t stop there. Periodically employees are brought back for refresher courses. For employees who are looking to make a career at Highland Park Market, they can take advantage of the Food Service Certificate program at Manchester Community College. Tim serves as a board member for The Connecticut Food Association; he was a co-chair on the committee that developed the Food Store Certificate Program with Manchester Community College. Highland Park Market is one of many grocery stores to offer this program to their employees.

Convenience
Busy times call for busy schedules. Highland Park Market prides itself on providing a convenient shopping environment. After surveying customers, they changed the layout of their stores to suit their needs. Home Meals to go are located in the front of the store for a speedy checkout. Produce is in the back “No more crushed tomatoes”. They took a chance and went against the industry standards, but the customers acknowledge and appreciate the effort.

In a world where quality has been replaced with buy one get one free and special tokens, and customer service has been replaced with little to no service, consumers have become skeptical. It is comforting to know that quality and customer service still exist. Thank you Highland Park for maintaining those values.

What Makes a Family Business Successful?

Family owned businesses are the backbone of our economy. The University of Southern Maine's Institute for Family-Owned Business reports that 35% of fortune 500 companies are family-controlled. It has also been reported that family businesses are responsible for 50% of U.S. gross domestic product, 60% of the country's employment and 78% of all new job creation. Unfortunately, less than 1/3 of all family owned businesses make it to the second generation, and 1/10 makes it to the third. So what does it take to succeed and be part of the 10% who survive? Lauretano Sign Group has just celebrated 60 years in business and Michael Lauretano Jr. is being groomed to take the business into its third generation.

Recently, I had the pleasure of speaking with the Principals of Lauretano Sign Group (Mike Lauretano Sr. Owner, Pat Byrne President & C.E.O, and Michael Lauretano Jr. Sales Manager) to find out the secret of their 60 years of success. Their story is one of heartbreak, perseverance and direction.

First Generation
Lauretano Signs was begun by Mickey Lauretano in 1947 as a protest to the cost of show cards (50 cents). Mickey (an artist) started to paint them for himself and found it to be a profitable way to earn a living. In 1966 Mickey died leaving his wife Amelia and 5 children. Amelia decides to keep the business alive and continue her husband's vision.

Second Generation

In 1972 her son Michael turned down a job offer (Science Teacher) and joined his mother to build Lauretano Sign Group to what it is today. Michael brought his enthusiasm and the work ethic his father gave him. Michael and Amelia learned to distinguish family and business, sometimes the business conversation continued to the dinner table, but Amelia also knew how to lead and allowed Michael to learn from his mistakes. Michael in turn has chosen to introduce his son Michael Jr. to the business in the same fashion.

Successes & Challenges

In 35 years Michael took a struggling sign company to a leader in the signage identification field. Michael accomplished this through his determination, focus, and vision for his company. He refused to let anything get in the way of the success of the company. Michael knew that big ideas come with big price tags. Balancing growth with cash flow was one of the greatest obstacles he had to overcome. In order to take the business to the next level meant purchasing the equipment and machinery. Michael found a way, and adopted the motto "act like you are going to be around for a while." "Most people think of great or grand ideas but are unwilling to take the risk to execute them. Execute."

His greatest success has been to adopt the Henry Ford approach surround himself with a team of people who know about the things he doesn't. He doesn't have to be the smartest person in the room; he just has to make sure the job is getting done in the most efficient manner.

Third Generation

Michael Jr has been a part of Lauretano Sign Group his entire life. He has paid his dues and worked in every department of the company. He understands what it is like to work for the company and answer to the department heads and managers. His current role is to lead the sales force. Pat Byrne states "Michael has brought new energy to the company, specifically in the sales and networking area. His ideas and his personality have been fully accepted within the company."

Staying Alive

Lauretano Sign Group has decided to be part of the 10% who survive. They will do this through good communication, knowing when to let go, and their willingness to execute their vision.