When the Business Is Also the Family, It’s Complicated


Family business owners and advisors gathered this week for another exclusive “Kaufman, Rossin Presents: Power Lunch with Tom Hudson.”  Hudson, a broadcast journalist with WLRN radio, guided the conversation through several elements of family business operations, from leadership to succession.

Healthcare is a business decision

Health insurance marketplaces officially opened to the public on October 1st, so it wasn’t surprising that the Affordable Care Act was a hot topic of discussion.  Expenses are increasing, the group agreed, and decisions about providing healthcare for employees must be assessed like any other business decision.

Eliza Fendell, third generation owner of international online shopping company Aeropost Network said she wants an “educated and healthy” workforce.  But that doesn’t necessarily mean providing health insurance to all her workers.  In the past, for some of her workers, such as those in warehouse jobs, it made more sense to spend on wages and allow them to remain eligible for government assistance on the healthcare side.  Aeropost Network has operations in more than 40 countries, and she noted many employees outside of the U.S. have access to much better healthcare coverage.  Fendell, whose title is senior vice president of culture, also acknowledged that her father, and her grandfather, might have made different decisions.

Passing leadership to the next generation

Even in family-owned businesses, leadership styles evolve over time. Joe Eppy, president of Eppy Financial Group, discussed the change in his company culture during his own lifetime.  After Eppy had a heart attack, a life coach helped him move to a more collaborative leadership style.  He and his wife now focus on the duties they are each best suited to, he told the group, noting that his strong suits (in sales and marketing) constitute 15% of business needs, while his wife comfortably handles the other 85%.  The rest of the team, including several family members, is also involved in the collaborative leadership of the firm.

Founder and CEO of technology company DBK Concepts, Danny Katz discussed his son’s integration into the business.  Katz is a CPA whose retail and healthcare industry experience with bar coding and inventory management led him to found the company 25 years ago; his son (now EVP) has focused on improving operations productivity, achieving major results.  According to his father, he’s just starting to get involved on the financial side of the business. Another entrepreneur integrating her son into operations is architect Daphne Gurri, whose teenage son is learning Quickbooks and working with her on Saturdays.

Common threads, unique situations

Among Kaufman, Rossin’s clients, some common threads tie family businesses together.  For example, many companies are now starting to see millennial generation family members enter the business. Kaufman, Rossin’s Senior Client Services Principal Robert Stone, CPA, ABV, CFF, discussed the differences in perspective, work approach and even management style that those younger employees can bring to a closely-held business.

On the other hand, Deborah Morrison, CPA, estate and trust associate principal, noted how each family situation is unique. Family dynamics can affect a closely-held business more than other types of companies, and navigating that can be tricky. Some business owners plan to transfer the company reins to a particular son or daughter while issuing stock to the other children. Others would like all of their children and siblings to have a role in the company. And some business owners simply want to ensure that their assets are protected for generations to come. Either way, proper planning is critical because as owners know, when the business is also the family, it’s complicated.

Janet Altman is a Marketing Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.

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