By Kip Kolson, Special for USADT
“Jack is entering his second year in business after starting with a single electric snowblower. At only 11-years-old, he saved all year to expand his equipment and batteries. Today he added a NEW 2-Stage Self-Propelled Snowblower and he’s gearing up for grass next summer with the addition of a 21” Self-Propelled Mower and Carbon Fibre Trimmer by EGO POWER+ Jack busted his butt last winter, waking up at 5:30am to serve his neighbors. I love his work ethic. He diligently watched the weather network on his iPhone to anticipate big dumps of snow, and he paid back his loan.
I’m not a sports dad. I’m not great at helping with homework (I try!). I’m not musically inclined. But… as an entrepreneur I’m here to help my kids get a head start in life! This is our father-son bond. I helped with business planning, forecasting, financing & payback (bank of dad), service agreements and safety training. Keep grinding little buddy!!”[i]
One gentleman responded to this LinkedIn post, chastising the father for making his son work instead of playing sports.
Sports teach teamwork, discipline, sacrifice, goal setting and dealing with both losing and winning. Is playing a sport the only way these values and principles are learned? Which will potentially have the greater long-term impact on a young person’s life?
What does the future hold for an eleven-year-old entrepreneur? I suspect great things for several reasons. First, he is thinking out-of-the box and is opportunity driven. Most children his age are playing computer games, not working.
He is taking responsibility for his own success, not relying on others.
He is a saver and smart money manager. The post says Jack saved his earnings to buy more equipment.
He is a visionary; he sees how more equipment for other tasks offers more opportunities for greater revenues and success.
He is committed and convicted to being successful and working hard. How many eleven-year-old kids willing get up at 5:30 am to go to work?
He is a risk taker. He invested his own money in his enterprise, but he also borrowed money from the “bank of dad” that he is required to pay back and did.
It would not surprise me to read another post in two years saying Jack had to take on some young employees.
While having those attributes is impressive for an 11-year-old boy, I believe more notable in this post is what dad said; “This is our father-son bond.”
Let us fast forward fifty years when Jack is 61. Since dad is an entrepreneur, we will assume he has been very successful, owning a couple of businesses and has a net worth of $75 million. Jack has three siblings involved in personal careers while Jack continued to build his business. A brother is a civil engineer working for a small company in another state, one sister works for a marketing company in New York, and the other sister is the distribution manager for dad’s company. Here are two possible scenarios.
Dad and mom have wills and trusts that divide everything equally to the four children. They have been quite charitable, giving to their church, giving money to and volunteering in local causes in their town as well as funding water wells in Africa and supporting The Salvation Army and World Vision.
Or, dad and mom created a family foundation and family office. During their lifetime, the entire family was involved in both entities, acting as a board of directors determining how to grow the enterprise, invest assets, and look for new opportunities. The family came together at least twice a year for combined business meetings and recreation in various vacation destinations. They had quarterly virtual meetings to discuss business, review financial statements, and plan their future. The children participated in deciding what causes the foundation would support, having the opportunity to present causes they cared about. Not only did they give money, but the entire family, including grandchildren, went to Africa to construct those water wells and visit orphanages in Mexico.
In the first scenario, it is probable the family is never together at one time in one place. When children marry and start their own families, the spouses’ families must now be considered when making Thanksgiving, Christmas, and birthday plans. The grandchildren’s activities may interfere with family get togethers. History tells us it is likely the family will experience that “Shirtsleeves to Shirtsleeves in three generations” statistic. The wealth, philanthropy, and the family unit will be shattered.
The second scenario offers these possible benefits.
A reason to come together physically besides holidays. The family office can foot the bill for travel and accommodations and fun activities for everyone.
Virtual quarterly meetings add more reasons for the family to communicate and share common causes, both in the business and the foundation.
The children and grandchildren are gaining first-hand experience running a business because the family office and foundation are businesses.
The family is becoming a business-wise team. While four children have various careers, some of the grandchildren may be employed in the family office or the foundation. In any case, they can learn how to read financial statements, develop business plans, hire and fire employees, identify business opportunities, make prudent investment decisions, and work through conflicts and differences. Every family has conflicts and that is a good thing if they are properly dealt with immediately.
Identifying and memorializing family values. Our values drive our decisions and actions. A family without defined and shared values is a rudderless sailboat. The winds and waves drive it in constantly changing directions depending which way the winds blow. It has no clear destination. It is lost at sea! Agreed upon values help the family develop a concise and achievable mission statement and game plan for achieving that mission. When everyone agrees on what matters most for the family and society and are rowing (I switched metaphors) together, the ship can overcome storms and tsunamis and reach its destination through multiple generations.
“In the late 1980s, Charles A. Collat Sr. asked his four children if they knew what it meant to run a family business.”
“Being young and naive, we said, ‘Absolutely, we know what it means to run a family business and to be effective owners,’” recalls Charlie Collat, 53, his son. The children didn’t really know — but they wanted to learn.
“Of the many things that we have learned over the years, one of the most important lessons was and is how to communicate with each other,” says Charlie, who today is president of Bay Pine Holdings (the family office) and executive vice president of Mayer.
Family involvement in the business started early. “It was very much a part of all our lives,” says Nancy. “We worked there summers and holidays. Charlie swept the floor in the warehouse; I did a lot of filing and one of my sisters answered the switchboard.”
They absorbed their father’s vision and values. “His vision for the company and family has brought us to the point where we are today.”
In the mid-2000s, a nationwide retailer asked Charles if he was interested in selling the business. He knew he didn’t want to sell, but he asked his children what they thought. “I figured it would be a good test to see what they wanted to do,” he says. “We left that afternoon saying, ‘No, we really want to keep it a family business’ – realizing there was a lot of responsibility that goes with that,” says Caki Mendel
As the third generation became more involved in the business, Charles’s three daughters — who were not working in the company — wanted to form a clearer connection with Mayer’s associates. Over the course of about a year in the mid-1990s, Nancy, Caki and their sister Susie Collat, now 56, visited all of Mayer’s locations — about 65 at the time.
The tradition continues today with members of the company’s leadership team visiting each branch annually. Members of the fourth generation, who range in age from 19 to 32, are becoming more involved. Two G4s currently work in the business.
David Goedecke, 32, worked after college for one of Mayer’s suppliers, then joined Mayer to start and lead the customer integration team.
“I have always had a passion for the company, the family, the legacy,” David says.
Today, Mayer is owned by the four members of the third generation, though they have started transferring some of the ownership to their children. The family’s real estate and other investments are also owned primarily by these four.
“We learned that family businesses often fail, not because of the business or the economy, but because of the family,” says Nancy. A family assembly, which includes all members of Generations 2, 3 and 4, meets once or twice a year. The family is setting up a family council with Susie as chair, Scott as vice chair, and three other family members serving as committee chairs focused on governance, education and unity.
Smith describes the Collat family as an “extraordinary family who is extraordinarily close.” This has driven the family’s community engagement, philanthropic work and responsibility to their associates and families.
“Apples do not fall far from trees, and the third generation continues the legacy of values given to them by the parents,” Smith says. “Generation 4 shares these same values.”
“One of our core values is to be a good citizen where we live and work,” says Caki. She coordinates associates throughout the company to give back in the communities in which they live and work. “We all seem to have a sense of pride — even our children who are not in the business,” says Caki.
About two years ago, Charlie Collat was working as Mayer’s chief operating officer while also working with the company’s chief financial officer to manage real estate and other investments owned by the family.
A family office, Bay Pine Holdings, was established, and Charlie became its president. He also remains an executive vice president of Mayer, though he’s no longer COO.
The Collat family owns the real estate for half of Mayer’s locations. (The others are leased.)
“Right now, the real estate side is directly tied to the business,” Charlie says. A longer-term goal is to grow the company’s real estate holdings outside of the Mayer locations and to potentially leverage some of those holdings in order to invest in other real estate.
In addition, the family has been building an investment portfolio so that it will have some liquid assets as a safety net.
In addition to managing the investments, Charlie is working with family members to be sure their estate plans are up to date.
He is also working on the Mayer Foundation, which has been funded primarily over the last 30 years from some of the Mayer’s profits. The family assembly has formed a committee that is creating a structure for the foundation’s future, including what types of causes to fund.
“The family is in the process of creating a formal process for the third and fourth generation of the family to decide the mission and purpose of the Mayer Foundation,” Charlie says.
“As the family grows, the family assembly and family office are going to be even more important to the next generation than to us,” says Susie Collat.”[ii]
“The Collat family is an extraordinary family who is extraordinarily close.” A family that works together really does work, but it takes commitment, conviction, cooperation, conflict management, coordination, hard work, planning, shared values, and a well-defined and executable mission. The Brennens could be this story in two or three generations because of that “father-son bond!”
“Two can accomplish more than twice as much as one, for the results can be much better. If one falls, the other pulls him up, but if a man falls when he is alone, he’s in trouble. Also, on a cold night, two under the same blanket gain warmth from each other, but how can one be warm alone? And one standing alone can be attacked and defeated, but two can stand back-to-back and conquer; three is even better for a triple-braided cord is not easily broken.”[iii]
[ii] Amping Up Structures to Prepare for the Future, Family Business Magazine, May/June 2020, Margret Steen, Pages 40-45
[iii] Ecclesiastes 4:9-12, The Living Bible
Kip Kolson is the president of Family Wealth Leadership, a multi-family office and family coaching firm, and author of You Can Have It All; Wealth, Wisdom, and Purpose—Strategies for Creating a Lasting Legacy and Strong Family. You can order your copy at Amazon, the FWL website below, or email email@example.com