LETTER FROM THE PUBLISHER
Family-Owned Businesses Are an Important Part of Our Community
PHOTO BY TERENCE DUFFY
When people are asked about family businesses , I think the first image that comes to their mind is what they find in their own neighborhoods — perhaps a dry-cleaning shop run by a husband-and-wife team , or a favorite local restaurant with one generation working the kitchen and another working the front of the house . By contrast , megacorporations with well-known national brands that seem to be everywhere in our lives often define what people think of as “ big business .” Those assumptions make it easy to overlook the fact that family-owned businesses come in all shapes and sizes and are not limited to entrepreneurs and so-called “ mom-and-pop ” stores . In fact , families own and operate more than one-third of all companies in the Capital Region , according to a Lending Tree survey . Many have sales in the millions of dollars per year , with some revenues even reaching into the billions . They also employ hundreds , and in some cases thousands , of local workers .
In the Capital Region , some family names are easy to spot because they are often on the front door and synonymous with the business . In other cases , the family connection may not be as obvious . But family-run businesses are very familiar to us because they are a big part of our everyday lives . We buy cars from them , such as The Niello Company , which we spotlight in this issue ; we eat in their restaurants ; we buy food and gadgets for our kitchens from them ; we build and update our homes using their products ; we drink our favorite beverages that they co-pack , and we even drive on roads that family-owned businesses build .
Some family-run businesses have become very familiar to us because they ’ ve been part of our lives for a long time , often for decades and through more than one generation . That ’ s the case with El Novillero Restaurant in Sacramento , Club Pheasant in West Sacramento and Genova Bakery in Stockton , all of which you can read about in this issue .
Research from the consulting company Deloitte shows that family-run companies have twice the revenue growth of those run by corporate management teams while producing 30 percent greater return on assets and 40 percent more shareholder value . They also bounce back from bad economic times more quickly , the research shows . In short , family-run companies enjoy longevity because they are successful , perhaps due to the entrepreneurial drive that created them and the pride of having the family name on the door .
Family businesses tend to share their success with the community , likely because they are so personally connected to it . The most recent Global Family Business Survey from
PricewaterhouseCoopers shows that 85 percent of family-owned businesses donate to philanthropic causes and volunteer in the community . In the Capital Region , we see that benefit in their generous support of nonprofits , museums and civic ventures .
Not surprisingly , family-controlled businesses face the same kinds of challenges as those run by large corporate management teams . They look at expanding into new markets , creating new products , finding capital to fund growth , and developing succession plans for the next generation of management . Flyers Energy in Auburn practices this : The petroleum company has diversified into car washes and real estate and is developing a succession plan .
We know that meeting those challenges can be further complicated by family dynamics . Jeff Wilser looks at how to support the mental health of those in your family business ( page 64 ). The objectivity and clear thinking needed to make business decisions can conflict with the more personal way families make decisions . It can , for instance , be hard for a company founder to know when to let go and allow younger family members to take the reins of a business or to allow them to change direction to keep up with more modern market demands . Laurie Lauletta-Boshart talked with members of major family businesses in our area about how they are passing the torch to the next generation ( page 40 ). The PwC study shows that two-thirds of the 2,800 companies it surveyed have a next generation family member working in the business , either as a director , manager or some other capacity , laying the foundation for the future .
Plus , there is the dedication toward the communities where these families have chosen not only to work , but to live . The owners of family-run businesses are more than merchants — their personal touch reflects our local culture . They are , after all , also our friends and neighbors .
We applaud family-owned businesses and are proud to focus on this subject annually . Our Capital Region has grown and prospered largely because of the incredible work and passion put forth by family-owned businesses , and I look forward to seeing what the next generations create to build even further on that foundation .
Winnie Comstock-Carlson President and Publisher
October 2021 | comstocksmag . com 19