Your Plumbing Business as a Family Affair

There are more than 2.8 million family businesses in the United States (see sidebar below), and the plumbing industry is a large part of that mix, because many businesses are handed down through the generations. But, running a family plumbing shop can present its own special challenges: How do you separate family matters from business? How do you define roles so family members are clear about their duties? How do you get family members to overcome immediate differences and see the ‘big picture’?

Share a Similar Company Vision
It’s not enough to designate which sibling goes out with crews on jobs and which one keeps the books. A family-run plumbing business, like any well-run business, needs a big-picture plan. “It’s important that the family business constantly reviews expectations,” says Joseph H. Astrachan, Ph.D., director of the Cox Family Enterprise Center at Kennesaw State University in Kennesaw, Ga. “They need to come up with the kinds of returns and other payment that owners can expect. They need to discuss the level of risk that is acceptable, and what the market focus is. And they need to agree upon employment policies.”

Compensate Without Money
Using money solely as a way to motivate those under you—especially family—rarely is a wise strategy. “You can use other resources as motivation, such as flexibility, being understanding in times of trouble, family pride and qualities like that,” says Astrachan, who is also editor of the Family Firm Institute’s Family Business Review. “This means they can make a choice to value quality over money, or people over money. This can build superior work habits, loyalty and customer retention.”

Your Successors
Grooming your children to take over the company can cloud its success. In fact, you could pass over highly qualified, unrelated people within your company—and, thereby, hurt morale and future business success.

You shouldn’t rule out your son or daughter eventually taking over, though. Your children most likely have worked for you on countless calls and have a feel for the business while helping you repair septic tanks. If you’re going to maintain the family face of your plumbing company through your children, you need to realisticically assess their skills and assign duties accordingly.

“Parents have both the privilege and responsibility of deciding a fair means of transferring the family business, often a highly subjective exercise, which leads into a quagmire of unproductive professional time,” says Brad Schneider, director of the Blackman Kallick Family Business Center in Chicago. “Because emotions often get in the way, many parents avoid the process of outlining a succession plan, thus encouraging each family member to create their own vision of fairness, which can be easily influenced by third parties. The key is to reconcile individual agendas with those of the company’s, and creating an ‘everybody wins’ strategy.”

The Handoff
Even if you have the next generation ready and waiting to take over, it’s understandable to be reluctant to step aside, which, realistically, may cause friction within the ranks and lead to leadership uncertainty. “Leaving forces a family business owner to acknowledge mortality,” Schneider says. “There’s an unwillingness to let go after a lifetime labor of love. Waiting too long drastically reduces the probability of a successful transition.”

Heidler admits that he’s only starting to get a handle on handing over the business. He’s seeking the consultation of attorneys—as well as resources available from the Plumbing-Heating-Cooling Contractors Association—to make sure the business will be ready for the next generation “We’re trying to figure this part of our business out,” he says. “There’s a lot for us to learn about this, but it needs to be done, especially if one of us unexpectedly passes away. We get a lot of support from places like the association, however, and we feel we’ll be ready to transfer over everything when we need to.”