According to Forbes magazine, family businesses generate over 50% of the US Gross National Product.
The downside is that less than one third of family businesses survive the transition from first to second generation ownership. Another 50% don’t survive the transition from second to third generation. The biggest issue with many family businesses is that they get stuck doing things the same way they have operated for years even when the business outgrows that structure. The founding generation holds on to the reins of leadership too long and won’t pass control to their children.
Fortunately, particularly in our industry, limousine companies that have heavy family controls in place, sometimes passed down through multiple generations, still manage to thrive.
A great example is A-1 Limousine, which began in Princeton, NJ in 1964, with just four taxi cabs and two limousines, but in reality it has roots back to the late 19th century, when it was a horse and buggy taxi service owned by Joseph E. Nutt and Son. Michael Starr and his wife, Marilyn, would eventually acquire and rename the business, and ever since A-1 Limousine has been entirely owned and operated by the Starr family. Michael currently serves as the company’s CEO, and his son, Jeffrey, who joined the company in 1985, has served as president and COO since 2004.
“My parents started the company, I’ve been here since 1985, and two of my children work here part time while going to school,” offered Jeff Starr in a recent Limo Digest interview. “Within our organization, we have several father/child and husband/wife teams that work for us. We just have a very family-oriented company and mentality. The company was started as a family business, and even though we have over 300 employees, it’s still treated as a family business.”
It’s to Jeff and his family’s credit that their company has continued to be successful as running a family-owned and operated business can very often be like navigating a minefield—blindfolded. From time to time we read about how family businesses only change for the worse when the pain is so great it reverberates through the entire company. The result is that not only does the company get torn apart, but the family does as well.
Our industry was rocked recently by the horrific reports out of Phoenix that the five family members responsible for operating ExStyle Limousine Company were found dead as a result of a murder-suicide. An explanation for why Driss Diaeddinn would have killed his two brothers, mother and sister-in-law before killing himself has been slow in coming. Zahi Jamal El-Rahi, a north Phoenix resident who used to drive for the family-owned limo company, told a Phoenix news outlet that he was stunned to learn that one of three immigrant brothers who ran the company shot his family members in the business.
“I cannot believe it. I still feel these guys are alive. To me, whatever the arguing was about is not worth it,” El-Rahi said. “Reports are the brothers tried to leave their mark in the highly competitive limo-service business and planned to open a bakery or restaurant, but drivers acquainted with the family believe finances may have been strained in recent months,” El-Rahi said.
Despite this tragedy, I can tell you from my own experiences that working with members of your family, at least as it pertains to my own company, has been nothing short of a godsend. I currently work closely, or have in the past, beside some of my closest relatives—including my brothers, Peter and Kevin, my daughters, Cory, Ashley and Kelsey, and Peter’s son, John Peter. Peter is my right-hand man and serves as ETS International’s Executive Vice President and Kevin oversees our maintenance department. The sons and daughters have worked in various capacities, from getting involved in sales & marketing, to washing the cars.
Together Peter and I make a very good team. Peter handles the reservations, dispatch and drivers; I handle sales, marketing and the accounting. What makes the parts work so smoothly is being siblings we know what makes each other tick. It also enables you to build a high level of trust and well-being, because you know should anything happen that impacts your ability to run the company, that there is a family member close by to pick up those reigns. And, unfortunately, I had the chance in the past year to prove that theory.
That day for me was May 8, 2014, when I wiped out on my brand-new Harley-Davidson Fat Boy motorcycle after taking a corner too quickly. The diagnosis: my right shoulder was broken, four vertebrae were cracked, and my right arm suffered such severe nerve damage it now lays at my side, a useless appendage. I would spend three days in the hospital, another 30 days home in bed recovering, undergo major surgery (with more to come), and watch as 30-35 lbs slowly slipped off my body. And while all this was unfolding, I tried hard to figure out how to still run a multi-million dollar ground transportation company, overseeing the logistics of 75 vehicles, 120 employees and drivers, and over 1000 clients.
Although my right arm was out of commission, the only right arm I really needed was back in the office. My brother, Pete, had long been the other “key” person at the company, and I had the comfort in knowing the company would continue to be successful, not only because of Pete but a staff fully-trained in handling all aspects of what needed to be done, who were more than capable of picking up the slack and keeping things running smoothly.
I have also been asked on many occasions what it was like having my children working at the company. I always respond that one of the advantages was I didn’t need to spend a lot of time explaining what “daddy does for a living,” because they have, in a lot of ways, always been a part of the business. We are very much a 24/7 industry and there were more than a few times they would hear me on the phone at the dinner table trying to figure out why a driver never made it to an airport pickup, or the middle of the night call I had to field from a driver trying to control a party bus that was definitely in high gear. Plus, it would be common to have our drivers transport them when they were younger to basketball games, proms, and so forth, so they eventually had a good idea of the difference between a “good driver” and a “bad driver” (and now and then report their findings back to me.) Of course, teenagers being teenagers, sometimes a project would take longer because their friends decided to go off skiing that week. And therein lays a major challenge of any business where family members are working in close proximity; where is the line you have to draw between being a boss and being a dad/brother/husband/wife?
But in the end I can only say that working with family members is a tremendous advantage, at least as it has shaped and molded the companies I have worked with. There’s never a doubt family members always have your best interest at heart, and by extension, the success of your company. They work hard, are fully vested in the outcome, and unless they have been forged by some warped sense of entitlement, never see their position as a free ride. There’s a one for all and all for one mentality that permeates throughout the company, especially when you go that extra mile to treat your other employees like members of your extended family.
Explains Anne Mucinskas, controller, HR director and one of those loyal-colleagues-turned-honorary-family-members of ETS International, “Everyone is family to Johnny.” //LD