The family-owned business: dream vs. reality
With crazy hours, small profits and no relief, a small biz is tough to hand down
THERE IS A smell. A suffocating, tear-inducing smell emanating from the Hefty bag of dog poop inside David Gerber's Rav 4.
The double-duty plastic containing the contents cannot contain the smell; it escapes, rendering those in its path defenseless.
Except Gerber. The man does not even smell the smell. He laughs when it's brought to his attention.
"Really? That? Ah" — he smiles and waves a dismissive hand — "you get used to it."
He focuses instead on the road, which swerves through a sprawling subdivision in the Issaquah Highlands, and stops his car every few minutes at the pet-waste bins that punctuate this landscape like exclamation points. Someone needs to dispose of this stuff. And need = opportunity.
The idea is simple; the problem, ever-present. People have dogs that produce waste that owners don't want to deal with. When Gerber and his wife, Amanda, batted around business concepts in 2008, this idea, of all ideas, spoke to them. They toyed with names. Sir Scoop-a-Lot? (Taken) We Scoop Poop? (Meh). Poopless in Seattle? Bingo. A website went up along with logos on their two cars.
"It's silly, funny and gross and disgusting," says Amanda Gerber. "But we want people to realize we're serious. This is our family business."
David Gerber sees a bright future for the company. He and his wife have two young sons, 7 and 8, who go out with him on routes, help organize invoices and sometimes tag along on Gerber's weekly — ahem — dumps at a North Bend waste station where he pays for disposal per pound.
The responsibilities of this venture have so intertwined with the family's DNA that Gerber can't imagine it not being part of their lives. He loves watching his children learn about hard work. He sees them grasp how money comes from time and sweat. Maybe one day, Gerber says, Poopless will expand beyond King County or franchise nationwide.
Admittedly, Gerber is in a honeymoon phase. His business turns a profit, his kids are still kids. They're too young to fight over finances or reject the business altogether.
But soon, because years have a way of fast disappearing, Gerber will find himself smack up against the questions that face every family business owner:
Who will take over once I'm gone? Will it be my children?
NINETY PERCENT of businesses in America are family-owned or controlled.
They range from behemoths like Walmart, Ford, Mars and Marriott to small businesses with less than 500 employees, which make up the vast majority. They produce everything from milkshakes to Thai food to billboards and bay windows. They steam our shirts, pour our coffee, wax our cars and bikini lines, sell our homes and arrange our funerals.
The very words you're reading are the product of a family business.
Research shows that family businesses generate more than 60 percent of the country's gross domestic product. They employ 62 percent of the U.S. workforce. Half of our total wages paid come from family businesses, according to the U.S. Small Business Administration (SBA).
The federal agency wrote in a 2009 report that the American economy "depends heavily on the continuity and success of the family business."
"Small businesses form the backbone of the U.S. economy," said Calvin W. Goings, regional administrator for the SBA. That holds true for countries across the globe.
Think about this for a minute. People can barely stand to spend a holiday weekend with their families, much less work alongside them 24/7. Yet, economies continue to churn because couples and blood relatives insist on taking this financial leap-of-faith together.
In some ways, it makes sense. Partners, siblings and children form our most trusted inner circles. We know their capabilities better than anyone else. We also know their every weakness. A family member can wield a knife like no other.
Which means that the dream of operating a family business can often be at odds with what roils underneath: drama, disorganization and no clear handover strategy.
It's estimated that 70 percent of family businesses die off after the first generation. Lack of a succession plan is a big reason. Some also cite estate taxes, also known as "death taxes," that fall on those who inherit businesses valued at a certain amount.
Of the 30 percent of businesses that do survive into the second generation, less than half carry on through the third, according to the Family Business Institute, a North Carolina-based advisory firm.
"How do you make a family business work? That's the great puzzle," says Steve Brilling, the family business director for Seattle University's Entrepreneurship Center.
And figuring out how the pieces fit is unique to each company. Take this newspaper. The Seattle Times, which has struggled for years with litigation and the economic pressures in the news industry, continues to maintain family control into its fourth generation. Publisher Frank Blethen, who backed an initiative to repeal the estate-tax law in 2006, has two sons who are employed with the company and part of a fifth-generation succession plan.
This loyalty and interest, Blethen says, is driven by what he calls a "very clear public-service mission."
Some children who grow up in a family business, though, end up resenting it. Brilling knows about this firsthand. His father owned a veterinary surgical-supply company when Brilling was a kid in the 1960s. To his mind, it was "the invisible person, the ghost at the table. It was hard to get freedom from it."
The business held no cache or glamour for him. He dived into a completely different field after college, but those roots influenced where he is today. From his perch now as a small-business adviser, he sees founders desperately trying to persuade their children to take over the family business.
Problem is, that can't be forced.
"The next generation doesn't always see the family business as cool. It's not an Instagram. You don't talk to a lot of young people now who say, 'I want to stay in the family business.' "
"If you don't innovate, you're probably going to go right over a cliff."
BOLLYWOOD MUSIC bounces off the chili-colored walls of Punjab Sweets on a warm afternoon, where Harpreet Gill is having a conversation with her mother. There's rapid back-and-forth in Punjabi; something to do with food, which veers into a discussion about an upcoming wedding, which ends with searching for a misplaced guest book. The conversation could give a bystander whiplash with all of its hairpin turns. Gill's mother lets out a breath and takes a seat.
Iqbal Dha is tired; exhausted, actually. She points to her shoulder, which needs rotator cuff surgery that she keeps putting off. Her body aches. It's always telling her to stop, slow down. But how? Running a restaurant requires living life on fast-forward.
"It's too much," she says, resting her hand on my arm. "It's not only an eight-hour job. It's day and night. Twenty-four hours. Twenty. Four. Hours."
Iqbal is 58 and has worked hard her whole life, harder here than when she lived on a farm in India and milked cows for cheese and plucked ingredients for meals straight from the earth. She'd never even seen a refrigerator until she came to this country in 1980.
Iqbal dreamed shiny dreams about the U.S. and begged her reluctant husband, Gurmit, to move from their village. Life would be easier in America. She knew it.
When the Dhas immigrated to Kent with their three small children, they had no jobs and lived with relatives. Gurmit found custodial work at Golden Grain pasta plant. Iqbal packed food for the airline industry.
Both stayed in these positions for years while raising their daughter and two sons. During this time, Iqbal cooked. She became famous among their Punjabi friends for her chana, samosas and roti. She tried her hand at sweets, something she'd never made in India, and converted the family garage into a low-budget, experimental kitchen. In 2001, the Dhas invested their savings and opened Punjab Sweets, an Indian bakery and snack shop, in a Kent strip mall.
It wasn't long before people noticed. Fans began to trek over from Seattle and the Eastside. Critics raved about the authenticity of the food. All this led to more write-ups and book mentions, expanded lunch and dinner items, and crowded tables at the restaurant. With the crazy hours came a sense of family pride.
Meanwhile, Iqbal and Gurmit had no handover plan. They figured they would sell when it came time to retire. Their children showed little interest in steering the ship.
"It always felt like my parents' thing," Gill says. "I was fine with helping along the way, but I was going to have my own career."
In 2006, something began to shift. Gill was two years out of a divorce and had a young daughter. She was searching for a change and discovered that her people skills and love for numbers and sheer ability to manage 10,000 things at once could elevate Punjab Sweets into an A-player. She graduated that year from Seattle University with an MBA.
At 37, she now oversees all operations. Gurmit handles the vendors, and her mother cooks. Even though they've hired plenty of help in the kitchen, Iqbal can't quite let go. She says she must make sure the food tastes like hers.
But it's Gill who brings the energy and ambition. She sees so much potential. There's the online-order universe, street-food trucks, wedding planning. She's negotiating a contract to webcast cooking videos. She wants people to understand how easy it can be to make Indian food.
The family does have their bad days. And when they do, Gill says, it feels like there's no escape. They must come in and run the restaurant. Together.
"That's the nature of the family business," she says. "You can't turn it off. Because we are a family and the business is ours."
Gurmit smiles as she speaks. His face literally glows. He remembers the day his daughter was born. He kissed her forehead and said, "Oh, how lucky I am to have a daughter! I will take care of her."
Now, everything is in her hands.
TIM LOUIE settles back in his office chair at Eighth Avenue and South Weller Street.
He could have done some things to spruce up this space at Tsue Chong Co. in the Chinatown International District. But that never seemed important.
Who has time to make an office look pretty with so much work to do? As president and the fourth-generation owner, Louie oversees one of the area's largest noodle companies. He manages 17 product lines ranging from wonton wrappers to rice noodles to crispy chow mein. Tsue Chong is also famous for its fortune cookies.
On a late summer morning, Louie pauses, letting his brown eyes wander around the factory. He used to spend hours here as a boy. He'd play with the dough, eat the cookies and watch his parents work. He loved how the factory smelled, a tangle of flour and steam and sweetness.
During high school and summers in college, his parents hired him to prepare noodle boxes and deliver products to restaurants in Chinatown ID. He made just above minimum wage, but the real reward, he says, was getting a bird's-eye view into how the family business worked.
Tsue Chong was started in 1917 by Louie's great-grandfather, who arrived in Seattle on a ship from Taishan, China. To this day, Louie says, the company uses "grandpa's recipe."
At university in Spokane, Louie focused heavily on math and science, thinking he'd be an engineer. His parents never expected their only son to follow them into the family business. But Louie saw the company doing well.
He wanted in.
"I saw how much it could grow," he says. He moved back to Seattle at the end of his sophomore year and finished school at the University of Washington.
His father, Henry, was thrilled to see his son take charge. Louie dived in, buying equipment and forklifts to better streamline the production process. He repaired machines, undertook sales and marketing, hired more workers. Louie pushed to get his products noticed at grocery stores.
Henry was relieved he wouldn't have to sell the company as he'd feared.
Fortune cookies, which are largely an American staple after a Chinese meal, are among Tsue Chong's best-known products. On a recent morning, a woman in a hairnet cracks 40 eggs into a giant tub of batter, which gets poured onto a mechanized cookie press.
The machine folds a prediction or an aphorism into each cookie. "You will make a change for the better within the year," intones one.
Reads another: "Goods that are not shared are not goods."
The irony of this particular message is not lost on Louie. At 51, he finds himself confronting the questions that once occupied his father's mind. He wonders what value, if any, the company will hold for his own children.
His son is 20 and wants to be a physical therapist. ("Which has nothing to do with noodles," Louie says, laughing.) There's also his 16-year-old daughter, who once worked a summer job here for two hours a day. "She thought it was really boring," Louie says.
He's not the type to pressure his kids. The way he sees it, he had free choice to pursue what he wanted to do. His children should chart their own paths.
Besides, Louie says, he's got time. His son told him to give him 10 years to let him decide if he wants to take over — or not. That sounded reasonable.
At the same time, he's a realist.
"I've come to terms that this might end with me."
Sonia Krishnan is a former Pacific NW staff writer. She can be reached at firstname.lastname@example.org. News researcher Gene Balk contributed to this story. John Lok is a Seattle Times staff photographer.