Grunke column: Keeping business in the family
First Interstate Bank and Worden’s Market might not appear, on the surface, to have a lot in common. One is a $7.3 billion community banking organization with 74 offices throughout Montana, Wyoming and South Dakota. The other is a specialty grocery and deli with a single location in downtown Missoula, where it has served the community since 1883.
But the two businesses share a similar ownership structure, in the sense that they are family-owned. And it isn’t hard to find other examples: 80 percent of Montana businesses are family-owned.
That represents a significant slice of the commercial activity in our state. Yet, until now, the unique challenges and opportunities that come with keeping business in the family have never been addressed directly through a program, office or curriculum in Montana.
That’s why, last month, we joined with Dr. Michael Braun — a University of Montana business professor with years of experience studying family-based and other business structures — to present the first-ever Family Enterprise Montana forum. Sponsored by the University of Montana School of Business Administration, First Interstate Bank, Anderson ZurMuehlen and the Missoulian, the half-day forum brought together more than two dozen individuals involved in family-owned businesses to discuss their experiences and to learn insights and strategies from Dr. Braun.
Attendees came from a variety of businesses and industries, including food & beverage, construction, telecommunications, real estate, manufacturing, back-office professional services and more. Some owned their businesses with their spouses or children; others had passed down a family business across generations.
Despite those differences, they shared plenty. Several spoke of the challenges that come from separating their personal lives from professional responsibilities. Others addressed concerns related to leadership training, family governance, exit planning and succession. While these issues mirror challenges faced by all businesses, they become especially vexing when they involve spouses, siblings or children.
While last month’s event was designed to help those businesses begin to address those challenges in new ways, it was also an exploration of an idea unto itself. I have long suspected that family-owned businesses in Montana have a strong appetite for an ongoing program that focuses on helping them through the particular challenges they face.
That hunch was loudly affirmed by everyone who attended the forum. As a result, we plan to work with Dr. Braun and others to develop a significantly larger program that serves not just a few businesses in Missoula, but family-owned businesses across the state.
The stark reality is that, nationwide, only 30 percent of family businesses survive to the second family generation. Only 12 percent survive to the third. Mom and Dad may have known great success with the family ranch or the manufacturing company they founded; but changing competitive landscapes, advancing technology and the different interests of younger generations have a profound impact on the ability of those businesses to survive or thrive into the future.
If a family business fails or is sold to an out-of-state interest, that wealth is lost from our communities. By developing a program to serve the specific needs of those existing businesses, we can enhance economic prosperity throughout Montana.
James Grunke is CEO of Missoula Economic Partnership. If you would like to receive information about future Family Enterprise Montana programs, please contact Desirée Stanley at 541-6461.