Hard work, strong values and careful planning help family businesses last.
by Jerry Davich
Family-owned businesses employ two-thirds of America's workforce and generate nearly 80 percent of all new job creation in this country. These so-called “mom and pop” companies, roughly 5.5 million strong, also comprise 35 percent of Fortune 500 firms and have an average lifespan of 24 years, according to U.S. Census Bureau data.
Still, only four of 10 family-owned businesses survive to the second generation, 12 percent make it to the third generation, and just 3 percent to the fourth and beyond.
“Research indicates that family business failures can essentially be traced to one factor: An unfortunate lack of family business succession planning,” according to the Family Business Institute.
How do successful multigenerational family businesses in Northwest Indiana buck the odds and, more important, why? Northwest Indiana Business Quarterly spoke with the people behind several such businesses and discovered that they share similar ideals: Pride, hard work, long hours, deep-rooted family values and a vision for the future.
“Natural Born Workforce”
Matthew Glaros was given sage advice that he took to heart when considering his career future. At age 22, he didn't seriously consider working at his father's business, Employer Benefit Systems in Dyer.
He was quite content to begin his career with a hedge fund organization in Denver after leaving the region for seemingly brighter skies. Then, he received an unexpected suggestion from an unlikely source–his wife's grandmother, Elaine Pellar of Munster.
“Why don't you start by first shingling your father's roof and then one day it will be your roof, too,” she told him. “What she said hit me square between the eyes and I've never forgotten it,” says Glaros, who's now 30 and vice president of sales for his father's business.
Matt joined EBS in 2007 and he hasn't looked back, much to his father's joy. “Though I never pushed Matt to be in the business, it was always a hope of mine,” says Will Glaros, who founded EBS in 1979. “There's always that dream for a father to want his son beside him in the family business. I couldn't be happier.”
This is a common theme and familiar chorus for owners of family-owned businesses.
“My dad had a natural born workforce at his disposal,” says Tim Ozinga, 27, referring to his father, Martin III, former president of Ozinga Bros. Inc. Today, the multifaceted ready-mix cement company is led by fourth-generation family members, including Tim, one of six brothers, who serves as the company's director of marketing communications.
Ozinga's first full year in the family business started at age 16, though he was never pressured to remain there. “It was always an option for us, never expected,” he says.
Three years ago at a board meeting, he mentioned that the company had much more potential to grow, especially with website development, public relations and corporate communication. “The next thing I know I had a new job that didn't exist before,” Ozinga says.
In 1998, Rik Dekker's father, Jan, made him an offer he couldn't refuse.
Jan, who was born in the Netherlands, was one of the world's leading authorities on vacuum applications. He asked his son to open their own business together. They started Dekker Vacuum Technologies Inc. in Michigan City, whose products are used in countless manufacturing processes, including chemical, pharmaceuticals, food processing and packaging, furniture making, plastics and wastewater treatment.
Will the business continue into the future under the guidance of Rik's two sons, 18-year-old “Irish twins” born 10 months apart? Rik is a hopeful realist.
“A family business can be a challenge, so I told my sons that the price of admission in our family business is an MBA,” Rick says. “I don't think they are part of the long-term plan, but who knows.”
Sugar-Coated Success
The Albanese Confectionery Group in Merrillville started as a small candy store selling other people's candy and roasted nutmeats. Today, it's worth more than $130 million, with two million visitors making an annual pilgrimage to the sugar-coated factory on U.S. 30, which boasts 250 full-time employees, 80 of them added just last year. In addition, several Albanese family members still work there. “We are growing and in a constant state of reinvestment,” says Bethany Albanese, the company's director of operations.
Her father, Scott, always had a passion for producing great food, but the business really took off when he dipped his passion into chocolate. “It led him into chocolate enrobing and panning with his delicious creamy chocolate recipe,” says Bethany, whose parents and grandparents taught her the meaning of having a tireless work ethic. “When you create something you are passionate about, it's natural to want your children to be a part of it.”
At age 20, Bethany began working at the store, and today she wears several hats while inside the spacious factory, which is again expanding. Along with her two sisters, they each had to apply for their jobs and were hired independent of their father's influence.
“There is no entitlement, and every day we earn our titles,” Bethany says. “That is the culture our dad created.”
Lighting the Wick Long Ago
Mike Cartolano's great grandfather brought his ancient craft for fireworks from Italy to America at the turn of the 20th century. He likely had no idea he was lighting the wick for a multigenerational family business that would explode into the Midwest's largest, most creative and technologically advanced fireworks company.
Today, under Cartolano's leadership, it's called Melrose Pyrotechnics Inc., employing 32 full-time staff members and providing fireworks entertainment to more than 350 customers over the Fourth of July holiday alone.
Located in Kingsbury, the internationally known firm also provides fireworks entertainment to more than 30 professional sports teams from the NFL, NBA, NHL and MLB. This includes the Chicago Bulls, Gary SouthShore RailCats and South Bend Silverhawks.
Did Cartolano's great grandfather ever dream of such an American success story? Probably not, but nearly 90 percent of first-generation business owners believe their company will remain in family members' hands. Why? Hard work, long hours and keen attention to their typically loyal customers.
“We do our best to hand-hold our clients and they appreciate it,” says Will Glaros of Employer Benefit Systems. “We only lose clients when they sell or close up shop.”
Will has been a registered health underwriter for decades, and EBS specializes in one field within the massive health insurance industry: employer benefits, such as medical, vision and disability. The annual challenge is to maintain clients' health care costs without rate increases.
The business has grown 30 percent since the implementation of the Affordable Care Act, mostly because of its highly experienced field of expertise. “Some of our clients have been frantic about the Affordable Care Act because no one completely understands it due to all of its changes,” Will says.
This echoes another familiar trait with family businesses: They understand their niche in the global market.
“There's not a whole lot of players in our industry,” says Rik Dekker. “One of our biggest challenges is educating the public as to what we do. People think we sell vacuum cleaners but nothing can be further from the truth.”
Dekker Vacuum is a privately held company operating in a 45,000-square-foot manufacturing, distribution and warehouse facility. It has grown to be one of the top vacuum equipment suppliers in the industry and, in 2007, was listed on the Inc. 5000 list of fastest-growing companies in America.
“I'd say 85 percent of manufacturing processes use vacuums of some form,” says Rick, who came to this country from South Africa in 1979, at age 10.
Carl Bossung's mother, Loretta, issued a familiar plea to her family during the final stages of her life: “Don't put me in a nursing home.”
Bossung didn't do that, but his family also couldn't find reliable, reputable and high-quality home care for his mother. This common quagmire led to the creation of Senior1Care in 2006, modeled after the care she needed before she died at age 95.
“A light bulb went on,” says Bossung, 70, a long-time certified public accountant who founded the South Bend-based family business with his three sons. “My mother would have been proud of our success and the home care philosophy it embraces.”
Bossung's son, Kyle, who oversees the agency's intricate automated scheduling process, also oversaw the family's “kitchen table planning” from day one. They designed the agency from the ground up.
“We always knew we wanted to operate a family business but we weren't sure exactly what to do,” says Kyle, 35, who first spent time in Chicago after graduating from Xavier University in Cincinnati.
Hard Work, Sweat Equity
Like most every owner from any generation, Cartolano is adamant about attention to detail, precision control and public safety, insisting on strictly using electronic firing for fireworks displays.
“He has also spearheaded safety initiatives for the professional fireworks industry, devoting nearly one-third of his own time to industry leadership to promote safety standards and regulations,” says company spokesman Jamie Lowther.
Today, Melrose Pyrotechnics stocks one of the most diverse fireworks inventories in the country, including 17 suppliers from four continents. The company also uses high-tech computer controlled firing systems to produce its multimedia shows.
During Matt Glaros' first two years in the family business, he mostly “rode shotgun” with his father, attending all meetings and learning the industry lingo.
EBS caters to roughly 120 clients, from mom-and-pop businesses that employ only two workers, to major corporations with 4,500 employees, such as Community Healthcare System in Munster. And EBS does this with only four employees.
Matt has since worked in every aspect of the business, from claims resolution and self-funded plan analysis to managing the firm's middle market business to business accounts.
At Ozinga Inc., each son (and also two cousins) offers a unique talent or skill to the mix, complementing each other's contribution. One trait has always been a constant since day one, they say. “The value of hard work was instilled in each of us at a young age,” Tim Ozinga says.
Each son was expected to learn every job in the ever-expanding business, from dispatch and sales to yard labor and driving a tractor. They each started working during summer breaks from school, whether it was shredding papers, sweeping floors or learning the ropes.
“Some jobs we liked more than others,” Ozinga jokes. “But we had to prove ourselves. None of us got off easy. Because our name is Ozinga, we had to take pride in our work. My dad's hobby is his work.”
In its first year, Senior1Care started with just three part-time caregivers and earned only $9,000 in revenue, prompting concern from everyone involved. Did they make a mistake? What should be changed? Is there market for another home care agency in a graying America?
They eventually ironed out the wrinkles and business skyrocketed 154 percent in three years. It now employs 130 caregivers, expanded its services into the Indianapolis and Carmel area, and recently nabbed the 2014 Small Business of the Year Award by the St. Joseph County Chamber of Commerce.
“We're amazed at our own success,” Carl says modestly. “But it took a lot of hard work.”
Looking to the Future
When Martin Ozinga's family came to the United States from the Netherlands, they settled in the small village of Evergreen Park, Ill. They soon cemented themselves in the community and, in 1928, Martin established a small coal and coke yard there. Ozinga survived the Great Depression and World War II to become one of the first ready-mix providers in the region, including Northwest Indiana.
Today, Ozinga still provides ready-mix concrete, as well as decorative concrete supplies and bulk materials while offering transportation services through an extensive network of truck, rail, barge and ship terminals.
“There are new adventures every day. It's the best part of our business,” says Ozinga, whose company is best recognized by its familiar red-and-white-striped concrete mixer trucks.
At Melrose Pyrotechnics, Cartolano's father, Anthony, collaborated with the Chicago White Sox in developing the exploding scoreboard in 1960, beginning a fireworks display tradition that continues today.
“Our forecasted data shows that in 2014 we expect to produce in excess of 1,000 events,” Lowther says, noting several international awards, including first place at the Da Nang International Fireworks Competition in Vietnam, second place at the Jinshan International Beach Music Fireworks Festival in China, and third place at the L'International des Feux Loto-Quebec in Canada.
“Under Mike's leadership since the early 1980s, Melrose Pyrotechnics was among the first adopters of new technology for firing shells electronically,” Lowther says.
Since accepting his father's business offer, Rik Dekker's company now serves the North America and South America market and is expanding into Europe and beyond. Predicted revenue for 2014 is $15 million, he notes nonchalantly.
“We are very much an active company, but we're becoming more proactive than ever before,” says Rik, who's 45 and now the company's chairman and president after buying out his father in 2004.
Each company has a shared vision for its future, with older eyes fixed on younger family members.
“I wouldn't feel comfortable leaving my business to someone who wouldn't take care of our customers, some who we've had for 40 years,” says Will Glaros, who feels reassured that his “baby” will mature just fine under his son's direction.
Looking to the company's long-term, possible third-generation future, Matt jokes about his 2-year-old twin boys. “I am my father's retirement plan and they could be my retirement plan,” he says.
At Ozinga Bros. Inc., the company's current president is Martin IV and his son, Martin V, could someday run the joint, though it may be a bit premature. “He's only 11 years old,” Ozinga says with a chuckle.
Melrose Pyrotechnics also has a plan in action to someday pass the torch to Cartolano's two teenage children. “They both work as operators at the events, growing up with the business just like Mike did,” Lowther says.
While all family businesses look down the road for forthcoming opportunities, they also don't forget their often humble beginnings by glancing back in their rearview mirrors.
Carl Bossung's first wife, Jan, helped create Senior1Care at the family's kitchen table before getting diagnosed unexpectedly with pancreatic cancer and passing away in late 2007.
“She's looking down and smiling on us, I'm sure,” Carl says.
