The Risk of Family Owned Business
Published by Kenno on Apr 28th 2017
Choosing to run a family-owned business that only manufactures in the United States is a risk - a big risk. Why would anyone choose to take such a risk? Do these risks ever pay off? With over 18 years of experience in U.S. manufacturing, our family has been through the peaks and valleys of family-owned business. We have found that there are pros and cons to the risks that our family has taken.
“It’s time for parents to acknowledge that there are many challenging, creative, well-paying jobs in manufacturing and encourage their children to consider them”, Hal Sirkin firmly expresses in his article on Forbes. As a kid who grew up in and out production facilities, this is the life I lived. My entire childhood was submersed in the life of manufacturing. I have grown to admire the people who worked in these factories and who continue to work here.
In the early 2000’s, Turtleback was manufacturing private label phone cases in bulk orders for large buyers. When the Great Recession ravaged the economy, most of our big customers were forced to take their business to offshore suppliers. This brought devastation to our business, which meant our family had to make some difficult decisions. Ultimately, we prioritized payrolls over personal mortgage payments. We took a risk and bet that we would figure out how to keep the factory lights on, while keeping our employees working.
We have discovered that the greatest downside to family-owned business is the financial risk. As we personally experienced, running a family-owned business during a time of financial downturn requires one to make self-less, sacrificial decisions. In Turtleback’s situation, we decided to put our employees before ourselves, which ended up being the best business decision in the long run.
The Harvard Business Journal’s study of family-owned businesses explains “…during good economic times, family-run companies don’t earn as much money as companies with a more dispersed ownership structure. But when the economy slumps, family firms far outshine their peers.” We believe that these findings prove what we have experienced ourselves: when family-owned businesses take a financial risk, they bind together and get to the other side, with more success in the log run.
Based on what Turtleback has experienced, I believe that the benefits of family-owned business far outweigh the disadvantages.
Some of the many benefits we have seen include:
- Financial Gains
When we decided as a family to put our business and employees first during times of difficulty, we came out on the other side. Ultimately, we have been successful in business and have made gains financially, because of our commitment to stick together when things looked grim.
- Economic Growth
As a family-owned business that only manufactures in the United States, we believe in spurring economic growth. We are choosing to support our Country, as we purchase, employ, design, and manufacture in America.
- Invested Employees
When you put your employees first, you create unbreakable bonds. Our employees are truly our family – a relationship that grows organically in a family-owned business culture, such as ours.
Owning a business as a family requires one to think outside of the box. When we were deciding how to handle the financial downturns of the past, we were forced to come up with creative solutions. These situations have spurred us innovative in every area of business.
Following the Great Recession, once we finally broke even financially, we looked at ourselves and asked, "Why did we take such big risks?" In some ways, it might make sense to cut losses and move in a different direction. However, I realize that having faith in our business’ ability to innovate and grow was the right thing to do. The risks we took led us to our current successes, which is a quintessential American. As American innovators, we trust our instincts, take aim, and figure things out along the way. We have found that the rewards of family-owned business have far outweighed the risks.
Do you love products that are made in the USA? Is there an American manufacturer who inspires you? Or are you an American manufacture? If so, I’d love to hear from you, drop me a note at firstname.lastname@example.org