Inside: Lamson Lumber and

the Personal TouchSpecial Succession

Section

FALL 2014

FAMILYBUSINESSMassachusetts

Off ic ia l magaz ine of the

NEFB CONFERENCESPEAKERS SHOW MANYDIFFERENT WAYS TO GROW

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For more than a century, we’ve guided business owners as they focus on the future and secure their

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D ED IC ATED TO N EW EN GL AN D FAM ILY B U S IN ESSES

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Massachusetts Family Business

Official magazine of the CONTENTS

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4 from the board Money Follows The Value

Special Succession Section

5 early succession plan Planning Preserves Business Integrity

6 seven steps to sound succession planning A Holistic Approach To Business Transition

8 private equity firms and succession See Your Business Through Outsiders’ Eyes

10 company profile: lamson lumber How Lona Lamson Transitioned From Teacher To Business Leader And Industry Advocate

16 perspectives of the younger generation Impressions From The Front Line

18 outstanding women The FBA Honors Those Who Have Excelled

12NEFB CONFERENCEHighlighting the vitality and flexibility of family businesses.

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Family-owned businesses have the latitude to make strategic decisions that would present barriers to inves-

tor-owned businesses. They can take risks without encountering widespread market pushback from shareholders they don’t know. However, sometimes pushback from the stakeholders they do know can be for-midable, as we have seen play out over the summer with the drama in the supermarket business.

That’s where the Family Business Asso-ciation (FBA) comes in. We are dedicated to helping family-owned businesses to improve their prospects, whether they’re startups or several generations old.

The FBA and Banker & Tradesman hosted the second Annual New England Family Business Conference (see cover story) in June at International Golf Course in Bolton.

The conference included awards for Out-standing Women in family businesses. Eigh-teen honorees were recognized, from a wide range of product and service industries.

At the conference, our two keynote speakers outlined their very different paths

to leadership positions in their second-generation companies. One of our panel-ists made the point that it’s just as impor-tant to pass along a set of company-based values as it is to pass along the family money. Each member of a women-owned family business panel revealed they’d not been the first choice to take over their fa-thers’ companies. They didn’t gripe about the early assumptions and long odds; the growth of their companies – collectively, over 600 percent during their ownership tenure – show that doing well is the best revenge.

Throughout the year, the FBA presents educational programs relevant to family businesses in each economic region. Re-cently held programs in September include “A Long Overdue Conversation: How Em-bracing Gay Family Members Can Enrich the Family Business,” and “Women In Power and Control of Family Businesses.”

The FBA has expanded its offerings to include facilitated peer-to-peer dialog groups. FBA member Valerie Bono and her sister, Maria Malloy, have begun the Next Generation Affinity Group for future gen-

erations, including today’s children.On October 23, the FBA will hold its

annual award ceremony, the 2014 FBA Awards for Massachusetts, to recognize successful family businesses, those who have demonstrated outstanding communi-ty involvement, overcome a significant ob-stacle or achieved excellence in marketing. All Massachusetts-based family businesses are eligible to participate. To date, final-ists have been chosen and announced; the winners will be named at the 2014 award ceremony at the Royal Sonesta Hotel in Cambridge.

You can be assured that FBA program-ming and service offerings will continue to be relevant, valuable and timely. The FBA staff, executive directors and sponsors re-ceive guidance regarding programming and other service offerings from the FBA Advisory Council made up of nine family business owners representative of the di-versity of Massachusetts family businesses.

Don’t miss out on all the resources and benefits of FBA membership. Joining is easy. Just contact Liz Pratt at (617) 218-2077 or lpratt@fbaedu.com. ■

The Devil You Know and the Value of the Unexpected

Letter from the Board

DIRECTORSJeffrey S. Davis, Mage, LLCAl DeNapoli, Tarlow, Breed, Hart & Rodgers, P.C.Brian Nagle, First Republic Private Wealth Management

101 Huntington Ave., Suite 500Boston, MA 02199fbaedu.com

FAMILYBUSINESSMassachusetts

Official magazine of the Family Business Association. Inc. Editorial | Advertising | Design

A Family-Owned Business Since 1872

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PRESIDENTEdward D. Tarlow, Tarlow, Breed, Hart & Rodgers, P.C.

VICE PRESIDENTCatherine Watson, Tarlow, Breed, Hart & Rodgers, P.C.

TREASURERRichard A. Hirschen, Gray, Gray & Gray, LLP

EXECUTIVE COORDINATORLiz Pratt

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5

One business, multiple children or family members. It’s a scenario rife with potential conflict.

In family business, each new generation multiplies the number of interested parties, often with their own competing needs and interests. Moreover, the younger generation typically brings its own ideas to the business, often moving the company further from the vision of its original founder.

The phenomenon isn’t new. One old Chi-nese proverb sums it up succinctly, saying “Wealth does not pass three generations.” Statistics back it up. Today, less than a third of all family businesses survive into the sec-ond generation, and just 12 percent make it to the third generation.

Still, some families do manage to get it right, navigating business transitions to the third and even the fourth generation. How do they do it? Often their success is based on strategies that include early planning, a collaborative environment, a respect for in-dividual talents and a recognition that single person needs to be at the helm.

Important lessons can be learned from companies now in the process of crafting transition plans, offering guidance both about what to do and what not to do.

When Approaches DifferConsider one Boston-area company. The

founder purchased most of the company’s holdings years ago, then retired and passed the business on to his son. That son is now in his 80s, and the family has been struggling to come up with a succession plan.

The reason: The owner’s two sons, now in their early 50s, don’t have the same business philosophy, and both want to run the busi-nesses. Given their different approaches to the business, succession options are limited. One could take the helm while the other takes a lesser role. Or the family could split the business in two, but that would eliminate economies of scale that now help to make the business profitable. Or the business could bring in an independent management com-pany to handle day-to-day operations, with

the two brothers taking seats on the board of directors.

To date, none of these options has been acceptable. The future is uncertain, and no resolution is in sight.

To Each His TalentCompare that to the transition being un-

dertaken by a Boston-area company that is just starting to involve the third generation. In this case, it is the son and the son-in-law, in their late 20s and early 30s respectively, being brought into the business. The current owner is taking a hands-on role, creating spe-cific opportunities for each to learn the busi-ness, develop skills and assume responsibility.

The two aren’t being treated as equals, since their skills and experience levels are different. As a result, their compensation is different, as is the path each is taking within the company. The son-in-law, for example, is now in the process of developing a business plan to grow a particular aspect of the busi-ness. The son, who has different talents, is tackling other projects.

The long-range plan: The current owner – now in his early 60s – plans to exit the busi-ness over the next 10 years, while continuing to provide support and consultation to the next generation. So far, the plan is on track.

Start EarlyOne lesson gleaned from these two sto-

ries: Starting early is critical. By bringing family members into business operations at a relatively young age, the owner can help train them and develop necessary talent. A professional adviser can help the family to develop a clearly articulated plan. By creat-ing a collaborative environment, children are part of the planning, and that eliminates surprises.

While one person will likely emerge to run the business, a good succession plan will take other family members into account. In some cases, family members are paid a sal-ary simply to stay away from the business. In other cases, they are considered a key part of company leadership. Finding the right ap-proach will depend on such diverse factors as the personalities of the key players, the needs of the business and the economic climate.

The succession statistics are daunting, but strategic thinking, inclusive planning and an early start are important steps towards im-proving the odds of a successful transition to the next generation. ■

SCOTT B. KAPLOWITCH, CPA, IS AN ACCOUNTANT AND

BUSINESS ADVISOR WITH THE BOSTON ACCOUNTING FIRM

OF EDELSTEIN & CO.

By Scott Kaplowitch

Early Succession Planning Leads to Better Execution

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Every business deals with transition, from meeting customer demands to launching a new product or ser-

vice or changing per-sonnel. For many, the most significant tran-sition is passing the torch of leadership, and family businesses present their own spe-cific challenges when

it comes to succession planning.While every succession plan is – and

should be – unique, there are steps you can take to help ensure a smooth transi-tion. Whatever your exit strategy, enlist the counsel of qualified, trusted advisors. And don’t wait to start planning! The best succession plans are initiated far in ad-vance of officially handing over the reins of leadership. Begin by asking yourself the following seven questions:

Are you (really) ready? Be honest: will you be able to truly step back and leave the company in the hands of the next gen-eration? If the answer is no, determine what steps need to be taken to make you comfortable with your decision to step away from the business.

Will you maintain a role in the busi-ness going forward? If your intent is not to remove yourself completely from day-to-day control of the business, decide

By Rawson Hubbell

Seven Steps to Sound Succession Planning

RAWSON HUBBELL

77

what you want your role to be. Work with the future leadership to put clear guide-lines around that role – as an ongoing ad-visor or board member, or in the case of an outside sale, a consultant for a defined period – to ensure a smooth transition.

Is the business ready? Now it’s time to determine whether the business is ready for your departure. Whether transition-ing within the family or preparing for a third-party sale, one crucial component is ensuring all financial records are in order. Having a professional review your records

can be extremely valuable as they can help confirm everything – from taxes and con-tracts to charitable giving – is accounted for and will withstand scrutiny.

Has the company been valued cor-rectly? For many family businesses, the sale or transfer can be a critical compo-nent to the long-term financial well-being of the family, whether directly or through the estate planning of the owning family member(s). It is, therefore, crucial to have your business valued correctly. An advi-sor will be able to help by reviewing the maturity of your business, the company finances and even the sales of comparable companies to help establish a value range. In addition, they can discuss with you how variables such as valuation discounts and hold-backs might impact the value and, ultimately, sale price.

Is the right structure in place? The sale or transfer of the business can be structured in a number of different ways and may depend largely on who the buyer or recipient is. • Intra-family gift or transfer – for full

or reduced value.• Sale to an employee stock ownership

plan (ESOP) – offers attractive tax and business incentives for the right kind of business.

• Sale to an outside party – “strategic” or “financial” buyer often offers the big-gest return to the owners.

Many times, we recommend that clients use an escrow to help protect both parties until the deal has been finalized. In addi-

tion, you will need to consider whether or not you will request any type of earn-outs, which may reduce the sale price but will provide an ongoing source of income as part of the deal.

How will you prepare key employ-ees? Uncertainty about the future can be a troubling distraction for employees. It is essential to take the necessary steps with key employees to instill confidence in the firm’s direction. Involve them as early as possible without running the risk of ham-pering the deal.

Are you ready for the future? Con-siderations around the sale or transfer of a family business extend beyond the company and can have a lasting impact on your financial stability. As part of evalu-ating your business’s exit strategy, enlist a qualified wealth management advisor to help ensure your financial values can be maintained over the long term. This pro-

cess might include a personal wealth eval-uation, discussion of personal goals and those for your family, and development of a financial plan. Be sure to consider things such as charitable and lifetime gifting to help ensure your legacy and family’s finan-cial health into the future. ■

RAWSON W. HUBBELL, CFP, IS DIRECTOR OF WEALTH

PLANNING AT BOSTON PRIVATE BANK & TRUST CO.

Investment products such as stocks, bonds, and mutual funds may lose value and are not insured or guaranteed by Boston Private Bank & Trust Company or any of its affiliates or by the Federal Deposit Insur-ance Corporation or any other government agency.

Views expressed in this piece may not be shared by the bank or its affiliates. This piece is meant for discus-sion purposes only.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or imple-menting any business, financial, tax or estate planning strategy.

IRS Circular 230 Disclosure: Pursuant to IRS Regulations, neither the information nor any advice contained in this communication (including any at-tachments) is intended or written to be used, and can-not be used, for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommend-ing to another party any transaction or matter ad-dressed herein.

“Considerations around the sale or transfer of a family business extend beyond the company and

can have a lasting impact on your financial stability.”

Edward D. Tarlow, Esq.Chairman, Family Business Practice

etarlow@tbhr-law.com617.218.2000, x2011

Family Business

is Our Business.

We are attorneys who know how to address the challenges of generational differences and family member relationships.

8

By Steven A. Gagnon

Succession Planning Through Private Equity Firms

– Preparation is the Key

A well-crafted succession plan is a vital tool for businesses today, and not just for those with an immi-

nent transition at the top. Any business with a potential change in ownership coming sometime in the next three to five years should start the process now of building a succession plan that meets the needs of its owner(s).

With increasing regularity, businesses are choosing external paths towards suc-cession planning, rather than turning things over to either family members or employees. Many times family members are not interested in taking control or the parent/grandparent does not feel com-

fortable leaving it to them, and the idea of other employees assuming manage-ment may not be viable. When looking externally, the best transition route may be with a private equity firm.

The gradual economic recovery since the 2008/2009 economic crash has con-tributed to this trend. Bank lending re-mains difficult to attain, but private equi-ty firms have cash available to invest. This cash flow often makes this exit strategy very attractive.

In addition, private equity firms must put this cash to work in investments or risk losing it. Therefore, multiples being paid by private equity firms have gener-

ally been increasing.To make this work, it all begins with

planning. There are many reasons for a business owner to begin the transi-tion process and create a succession plan before it is time to sell. The age and/or health of the owner are certainly factors, as is the desire to move on to his/her next phase of life, perhaps retirement or a new business challenge. Once an owner de-cides to choose the private equity path, planning should begin immediately–the sooner the better.

A succession process starts with what financial planners call the pre-diligence phase, a critical time to establish the cur-

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Business success isn’t something you just hope for. You build it with a solid financial plan. Start with a Northwestern Mutual Financial Advisor. Together, we’ll design a personalized plan to help your business achieve its full potential, including risk management and business succession. Who’s helping you build your financial future?

David C Mc Avoy Managing PartnerBoston(617) 742-6200nmfn-thebostongroup.com

Together, we’ll build a financial plan for your business.

05-3077 © 2014 Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities) and its subsidiaries. Northwestern Mutual Investment Services, LLC (NMIS) (securities), a subsidiary of NM, broker-dealer, registered investment adviser, and member of FINRA and SIPC. David Charles Mc Avoy, General Agent(s) of NM. Managing Partners are not in legal partnership with each other, NM or its affiliates. David Charles Mc Avoy, Registered Representative(s) and Investment Advisor Representative(s) of NMIS.

rent value of the business and take steps to move it towards a maximized exit val-ue. The value is most often determined through a multiple of Earnings Before Interest Taxes Depreciation and Amorti-zation (EBITDA). It is common in nego-tiations for potential buyers to attempt to drive the EBITDA number down; natu-rally a seller will want to prevent that.

This is where pre-diligence is a strong safeguard. Owners should examine their business through the eyes of potential buyers in order to gauge strengths and weaknesses in an effort to maximize the company’s value upon sale and to prevent downward adjustments proposed by the buyer. It is also essential to set a goal for the business to determine what the owner needs or wants from the business finan-cially. Most likely this is the major source of income and will not easily be replaced once the sale has occurred, and they will need to last a lifetime. Identifying this value gives an owner a roadmap on the steps needed (such as increasing sales or upgrading technology) to achieve desired valuation before private equity buyers are sought.

Other considerations to be addressed during this pre-diligence period include whether or not the employee base (or a portion of it) will be retained after the transition and how long the owner plans to stay. Often a period of 12 to 18 months is desired for an owner to remain on while the transition takes place.

Once pre-diligence concludes, employ-ee considerations are set and the terms of the succession plan are established, an owner should talk to a business broker to identify the right private equity firms to approach as potential buyers. The broker will narrow the list to those firms that best meet the seller’s desires and then solicit bids. After a bid is chosen, negotiations begin, conditions of sale are set (regard-ing employees, ownership transition and other considerations) and the acquiring firm begins its diligence process, which can take anywhere from a few weeks to over six months.

This is why a proper succession plan/pre-diligence pays dividends. A clean and quick diligence process will often lead to a completed transaction with mini-mal to no adjustments, while a poorly executed plan (or none at all) can mean

large downward adjustments on the sales price or even a broken deal. It’s true that time and legwork are needed to get a suc-cessful succession plan in place, but this investment far outweighs the risk of not having a plan. Unforeseen issues, such as the sudden illness or even death of key management people, can put unprepared businesses in immediate danger and leave them open to the predatory advances of outside interests seeking to either take over or liquidate. Failure to plan can also place a business behind the curve in terms

of peak times or economic downturns, which could greatly damage the overall value.

Once again, preparation is essential for succession planning. For owners who have spent their lives building a thriving business, a well-executed succession plan can provide the peace of mind in knowing there will be continued success for years to come. ■

STEVEN A. GAGNON, CPA, IS A PRINCIPAL WITH

BLUMSHAPIRO.

1010

When 22-year-old Rolla S. Lamson started an ice deliv-ery service in 1887, he proba-

bly didn’t think he was laying the ground-work for a business that would thrive for five generations. Now, 127 years later, R.S. Lamson & Sons is a staple to the area building community and an esteemed fig-ure in the lumber industry.

From its early roots delivering ice out of Hudson’s Tripp’s Pond, the company has evolved into a trusted supplier of lum-ber, millwork, building materials, kitchen

cabinets and stone. Through the years, Lamson family leadership has remained constant, with each generation upholding their founder’s emphasis on maintaining valuable relationships and providing top-quality products and service.

Five Generations of Family Leadership

Company patriarch Rolla Lamson raised three boys, one of whom was killed in action in World War I. Remaining sons Albert and Chester became partners in

their father’s growing business, spurring the renaming to R.S. Lamson & Sons. While Chester focused on sales, eldest son Albert eventually took the helm, then passed the business along to Chester’s only son, David.

A sign of the times, David’s three daughters weren’t expected to take over the male-oriented business.

“My sisters and I grew up hearing peo-ple tell us to marry someone to take over the business,” said Lona Lamson, current president. With her own plans in mind,

By Debbie Swanson

R.S. Lamson & Sons, Now Run by the Family’s Daughter

Company Profile

Left to right: David and Elsie Lamson, third generation; Lynne Sheldon and Lona Lamson, fourth generation; Lindsey Stepp, fifth generation, holding Harper Stepp, sixth generation; Elizabeth and Eben McCormick, fifth generation.

11

she earned a master’s degree in psychol-ogy, then moved to Montreal to work as a teacher. It wasn’t until a visit home while between jobs that she began get-ting involved in the business.

“Thirty-eight years later, and I’m still here,” she laughed.

She quickly became entrenched in the career change, taking business classes and staying active in the Northeastern Retail Lumber Association (NRLA), of which the Lamson family has been a part since 1955.

“Lona’s dedication to the industry has been outstanding,” said Rita Ferris, president of the NRLA. “She’s served as the president of the Massachusetts Re-tail Lumber Dealers Association (a local affiliate of the NRLA) and has been a strong legislative advocate on industry issues. She’s also been a huge advocate for industry education.”

Today, R.S. Lamson & Sons is proud to be ushering in its fifth generation with Lona’s grandson, Evan McCor-mic. A Bolton native, McCormic studied mechanics, then turned his focus on the lumber and building supply business.

“There are four other grandchildren, still young, so I’m sure others will be-come involved, as well,” Lamson re-ported.

Strength from Valuable, Long-Term Relationships

“When I go to Lamson’s, I know all the employees. Most of them have been around 20, 30 years,” said builder Ron Ham, of Ron Ham Construction out of Sudbury, Mass. “I’ll send my customers there, because I know Lamson’s will treat them right [and] provide the knowledge they’ll need.”

Lona Lamson agrees that many of the employees boast a lengthy history with the family-friendly company; several have been on staff over 25 years.

“We love our long-term employees, but it can be a double-edged sword, so we also strive to bring in some younger people to keep us moving forward,” she said.

A recent addition was a new market-ing manager, who will focus on growing

their social media presence. While the company didn’t rely much on print ads in the past – Lamson said word seemed to spread through outside sales people and satisfied customers – she recognizes the growing need for Facebook and on-line media.

Longevity isn’t just for employees; regular customers have also been com-ing through the door for numerous years.

“Many of the contractors we see been coming in so long that now that their children are running the business, and they come in,” Lamson said. “We know the husbands, wives, sons, daughters, of our customers.”

A Competitive EdgeIn an industry where big-box stores

are eager competitors, genuine care for its customers gives Lamson’s an edge. That’s what keeps Ham, a loyal customer for over 22 years, coming back.

“You know you’ll find expertise when you stop at Lamson’s,” said Ham. “They make it easy for builders; they’ll order specific things we need. They’re able to take off with our plans and come back with a list and prices. And they’ll get what you need out to you in a couple hours. You don’t get that at the big-box stores.”

While socializing is always welcome – the company is known to hold cookouts for contractors – project talk is never at a shortage.

“Particularly with some of the big-ger projects – like a kitchen – they come here because they want someone that will take the time to talk with them,” Lamson said.

Their industry involvement keeps

them abreast of news and changes, which they pass along to their customers.

“The family is always looking for ways to provide the best service,” Ferris said. “One way is by participating in industry-specific roundtables, where dealers share best practice ideas and identify solutions for customer problems.”

“They also take the time to educate their employees and know what laws or regulations are in play that can impact their business and their customer’s busi-ness. If there is a way they can help their customers with compliance, they’ll do it,” she said.

Women-Owned BusinessWhile the name may lead you to be-

lieve otherwise, the passing of the torch from David Lamson to Lona enabled the company to become certified as a Women’s Business Enteprise (WBE), something which gives the company an advantage when bidding for contracts.

“With state and federal projects, when contractors are bidding on jobs, they have to fulfill a certain percentage of work with minority and women-owned business,” she explained. “It’s been a help.”

The company is also a certified Green Dealer, an independent program which certifies lumberyards or building mate-rial dealers if at least 75 percent of their personnel undergo specific training pro-grams on the basics of green building science and green product knowledge.

While a fifth generation business is a rare find, Lona Lamson modestly insists that it’s not so uncommon in the lum-ber business, saying she’s met with col-leagues in their fifth, sixth or seventh generation. “Once you learn this busi-ness, you stay in it,” she said.

As businesses of all types face new challenges and larger competition, keep-ing sight of its founding values and re-maining loyal to the customer and in-dustry have served well for this trusted Hudson fixture.

“It’s the kind of store you want to survive,” said Ham. “A home-town, fam-ily business, dedicated to taking care of their customers.” ■

“My sisters and I grew up hearing people tell

us to marry someone to take over the business.”

— Lona Lamson, president,

R.S. Lamson & Sons

12

Every multigenerational family business has a story. Usually, the story makes it to the company’s

website, a string of genealogical and busi-ness facts that anchor the reader in time and place, and indentify who in the busi-ness they know or might have known. But to get the story behind the story, it helps to be in the room with a like-minded au-dience of dozens of people, listening to the highly individual stories of the people behind the businesses.

The two keynote speakers at the New

England Family Business Conference, held in Bolton in June and sponsored by the Family Business Association and The Warren Group, publisher of Massachusetts Family Business, shared their experiences.

Bringing Outside Experience Back Home

Chris Raveis, managing partner at Raveis Real Estate, said that most of his classmates headed straight to Wall Street while he stayed at his parents’ home, tak-ing on the role of sales agent in his father’s

company. Chris made that part of his life sound unglamorous when he spoke, but related that within three years, he had established a successful momentum by working seven days a week. The catch: While he knew he was successful, he did not feel entirely independent in that suc-cess.

So he chose to strike out on his own, moving to Atlanta, Georgia, right before the 1996 Summer Olympics. He lived modestly, and overcame a lack of bank cre-dentials and the must-have-MBA mindset

By Christina P. O’Neill

A New LookNew England Family Business Conference

Brings Together Many Points of View

Leo Vercollone, president of VERC Enterprises, framed by a back-in-the-day photo of himself and his brothers at the time they joined their father’s company.

Photos by Laura Alix, The Warren Group

1313

to crack the commercial real estate market in Atlanta. He joined Jones Lang LaSalle (now JLL), where he became one of the top five commercial real estate brokers in the Atlanta area. Meanwhile, he said, his father, William Raveis, was diligent in keeping him updated about the state of the family business.

He subsequently moved back home to start Home-Link Services Inc. with his fa-ther in 2000. The venture-capital-backed company marketed home products and services to the customers of real estate brokers, with the goal of reducing reloca-tion costs. Chris headed a national sales team for Home-Link that signed 257 real estate companies over Home-Link’s three-year life. When the dot-com bust loomed, venture funding was starting to dry up, and the decision was made to sell the company. Chris took it as a learning opportunity as he had amassed valuable information working closely with the top CEOs and management teams of the top U.S. real estate companies. It was at that time that Chris made the choice to return back to the family real estate business and spearhead the company’s expansion out-side its Connecticut home state.

William Raveis Real Estate now has the majority of its offices outside its original home state. It has 46 offices in Connecti-cut and 36 offices in Massachusetts, 11 in New York, four in Rhode Island, two in New Hampshire and, since the confer-ence in June, has added one in New York City and seven offices in Vermont. The company is a second-generation business,

now with six children between Chris and his brother Ryan, that will take over the reins in future years.

He said that the second generation “is really critical” to the health of a family business. His pointers:• Have respect for the generation be-

fore you; be patient and learn how you fit in.

• Let the next generation spend time gaining independence and working outside the company.

• Find your passion – Raveis related that his passions are goals of growth, entrepreneurialism and revenue-building.

• Let the next generation own what they do.

• Don’t force something that’s not meant to be; and keep your eyes open.

• Communication is the glue that holds a family together.

High-Octane HarmonyLeo Vercollone, president of second-

generation VERC Enterprises, has built that business in a way that defies a lot of the stereotypes that outsiders may hold about the convenience-store industry.

VERC has been voted as one of the Best Places to Work by The Boston Globe, and the company is very active in commu-nity affairs in the municipalities in which it has outlets. VERC had its beginnings with Vercollone’s father Eugene, an Ital-ian immigrant with a high school educa-tion and, apparently, a premium-grade measure of common sense.

“My children get along with my cous-ins,” Leo Vercollone said; his father had instilled awareness of the importance of family harmony 30 years ago.

VERC Enterprises began as a family-owned car wash business; it has subse-quently grown into a retail convenience store/gasoline station and carwash group operating 26 facilities in Massachusetts and Southern New Hampshire.

Leo Vercollone graduated from Boston College in 1977. He told conference at-tendees that he had 20 post-graduate in-terviews and 20 rejections. He joined the company in 1978.

Throughout the life of VERC Enter-prises, its leadership has tried new things, not all of which have gelled, but the com-pany and its leadership have been nimble enough to rebound. A car-rental compa-ny, VERC Car Rental, established in 1979 as an adjunct business to the gas stations, was subsequently split off to Leo’s brother Jack, to the mutual benefit of both com-

Panelists Phyllis Godwin and Jennifer Lee Colosi tell of their experiences taking on leadership roles in their fathers’ businesses.

Aviva Sapers, one of the Outstanding Women of Family Business winners, spoke at the conference breakfast.

“Chris Raveis became one of the top five

commercial real estate brokers in the Atlanta area; meanwhile, his father, William Raveis,

kept him updated about the family business.”

Continued on page 14

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panies. Leo Vercollone noted the hugely different lifecycles of a convenience store enterprise, which typically sells a full ship-ment of gasoline in 48 hours, versus the debt-laden business structure of an auto rental company. VERC Car Rental now has seven locations and 400 vehicles. And family harmony, Vercollone said, is intact.

Another endeavor, QuickKava, a coffee franchise, was shelved after two and a half years and $500,000. Key to that decision was family consensus.

Vercollone’s advice: Be a difference-maker, keep growing and stay relevant. The company’s advisory board meets twice a year, but, Vercollone cautioned, quoting management expert Peter Druck-er: “Culture eats strategy for breakfast.”

A typical VERC station turns over its gas inventory in two days, but the same can’t be said of its workforce. The con-venience store industry yardstick is 100 percent turnover a year; at VERC, it’s 40 percent. This could be in part because of a company policy of maintaining a work-force staffed 20 percent with individuals with physical and/or intellectual disabili-

ties. VERC partners with Best Buddies, Minuteman Arc, Eastern Middlesex Arc, Road to Responsibility, Vinfen, May In-stitute, BAMSI, GROW and the Charles River Center to maintain this goal.

VERC Enterprises also participates in the Massachusetts Re-Entry program, which matches up formerly incarcerated people with job opportunities. The com-pany has received local and national at-tention for this effort. Its goal is for 5 per-cent of its workforce to be comprised of both male and female re-entry candidates.

Vercollone tells Massachusetts Family Busi-ness that family-owned businesses have a distinct advantage over publicly-traded companies in terms of the ability to en-ter new endeavors and to exit those that aren’t working.

Help SessionsThe breakout sessions provided their

own insight. Thomas Rogerson’s session on family sustainability focused on – in his words – “not only getting the money ready for the family, but getting the family ready for the money.” The goal of trans-ferring values and purpose, in addition to assets, can be met with the construction of an integrated family governance plan. He cited his own family’s experiences, as well as others’, and outlined various types of trusts that can help achieve financial goals. But philosophy trumps legal struc-ture, he cautioned, quoting Warren Buf-fett, who said he wanted to leave his chil-dren enough money to do anything, but not enough to do nothing.

In “Growth Strategies and Keys to Success,” three female panelists shared a

Chris Raveis, managing partner at Raveis Real Estate, told the audience of his low-key beginnings in what is now a leading family-owned real estate business.

“Throughout the life of VERC Enterprises, its leadership has tried new things, not all of

which have gelled, but the company and its leadership have been

nimble enough to rebound.”

15

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common trait; they took their businesses over from their fathers in male-dominat-ed industries. They have dealt with the cultural byproducts that amounted to cherche l’homme (look for the man). Dur-ing their respective tenures, their com-panies have grown by an aggregate 600 percent. They covered a wide range of other topics, not the least of which was matching their company responsibilities with their skills; managing growth; when to take consultants’ advice and when not to.

In “Marketing and Communica-tions: Propel Your Business Forward,” a multi-person panel addressed marketing and growing a family-owned business. Industry experts and family business professionals who saw their marketing campaigns successfully implemented, and grown their businesses accordingly, dis-cussed their paths to success.

“Managing Conflict in a Family Busi-ness,” another multi-person panel drew from their own experiences of working for family-owned businesses to empha-size the importance of creating role clar-ity, increasing transparency in promo-

tions, opportunities and compensation, and immediately addressing workplace conflicts. Family-owned businesses face the challenge of meeting these expecta-tions among family and nonfamily em-

ployees of the organization. ■

CHRISTINA P. O’NEILL IS EDITOR OF MASSACHUSETTS

FAMILY BUSINESS. SHE MAY BE REACHED AT CONEILL@

THEWARRENGROUP.COM.

Presenter Tom Rogerson’s panel included insights and lessons from his own family’s business.

16

A recent conference for enterpris-ing families – those in family businesses and others who had

significant assets in common – included a panel of members of the next genera-tion. These were the heirs apparent, the chosen ones who are challenged with the opportunity and responsibility to take their families’ enterprises to the next generation. Theirs is a role of stew-ardship for not only the tangible assets traditionally associated with wealth, but for the intangible ones – the values that

can sustain and even propel the fam-ily forward. The key talking points of these stewards is worth noting, and can serve as a guide to members of the se-nior generation on topics they need to address.

Bringing Value to the FamilyFirst, and perhaps foremost, they

talked about their desire to bring value to the family and its holdings. They re-alize that they are not clones of their parents, and the value they bring to the

enterprise needs to be their own.Next was communication, recogniz-

ing that all too often challenging mat-ters are left unspoken for fear of making them worse. These younger generation members, unlike many of their parents, are willing to take the risk to have dif-ficult conversations, realizing that the potential payoff is worth it.

They spoke of the need for planning and recognizing that alignment among stakeholders of both vision and strat-egy, short-term and long-term, is vital

By Paul Karofsky

The Importance of the Perspectives of the Younger Generation

17

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Building Family Trust for Generations

For over 150 years, generation after generation of New England’s family businesses have turned to Hemenway & Barnes for trusted advice about

complex estate, tax and succession issues, charitable planning, and more.

Our clients turn to us to help protect and preserve their assets, to ensure the well-being

of their families and to distribute assets in accordance with immediate and long-term needs and goals.

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families trust Hemenway & Barnesto help them find solutions.

to success. As these younger generation members talked about planning, they expressed the desire to work together with their parents and other family members to craft the necessary plans that will afford a seamless transition of both leadership and ownership with clarity on responsibilities and decision-making authority. They want to be sure that their roles are determined by the match of their skill sets with the needs of the business. As dialogue continued, “contingency planning” was discussed, acknowledging that the unexpected might occur and both the family and the enterprise need to be protected from the unknown.

The Heart and Soul of Transition Challenges

The panel then shifted its focus to the heart and soul of transition challenges, the younger generation taking hold and the senior generation letting go. There is the classic dynamic here that the younger generation can’t take hold until the senior generation lets go. And, of course, the senior generation won’t let go until the younger generation is ready to take hold. The responsibility for transition lies in both hands. Seniors must help the next generation under-stand what knowledge, skill and expe-rience is required of them in order to be able to take hold. Likewise, the next generation must address a professional development plan with benchmarks and accountability that demonstrate com-petency to the seniors.

Implicit, but infrequently talked about, is what the younger generation needs to do to be sure that the needs of their parents are met. These needs are social and emotional as well as financial.

As discussion about the process of transition unfolded, the younger gen-eration spoke of the value of keeping employees informed. The water cooler and coffee bar are still the hubs of chat-ter among those who work with en-terprising families. Little can be more destructive to employee morale than inaccurate rumors. Younger generation family members will always be viewed

through critical, microscopic eyes, so why not set the record straight at the outset and even provide a vehicle for feedback? Though not discussed at the

conference, we encourage 360-degree performance appraisals for members of the next generation to support them in their quest for leadership. Self-aware-ness is the most important attribute of leadership, and a 360-degree evaluation can provide process and content for self-reflection and appropriate action.

The final topic of discussion was

bringing in the right consultant. Mom and Dad’s accountants, bankers, insur-ance professionals, attorneys, and finan-cial advisors may not be right for their sons and daughters. Simply, if painfully, stated: They might be too old to relate effectively.

We encourage next generation of emerging leaders to be involved in the selection process of those professionals, as well as for family business consul-tants if and when needed.

A great opportunity exists for the senior generation to acknowledge and reinforce these contributions of next generation family members. The mes-sages from these young leaders could more than prime a textbook on success-ful succession.

What’s that old expression? From the mouths of … ? We still have a great deal to learn. ■

PAUL KAROFSKY IS THE FOUNDER AND CEO OF

TRANSITION CONSULTING GROUP AND CHAIRMAN OF

THE PEER ALLIANCE.

“The younger generation can’t take hold until the senior generation lets

go. And, of course, the senior generation won’t let go until the younger generation is ready to

take hold.”

18

Outstanding Women 2200114

DE D I C AT E D T O N E W ENGLAND FA M ILY BUS INESSES

The Inaugural As a new addition to the New

England Family Business Con-ference, this year the Family

Business Association and The Warren Group honored the exceptional women of family businesses at a special awards breakfast.

The Warren Group editorial board set out to find female family business pro-fessionals who demonstrate outstanding leadership and commitment both within their businesses and in the communities they serve. Nominations poured in and each was carefully reviewed. The follow-ing 16 phenomenal women are the inau-gural class of Outstanding Women.

Carol Bulman has run Jack Conway & Co. since late 2009, shortly before the death of its founder, her father. Only 18 months after his passing she reported record growth, outpacing the state by 11 percent in 2013 sales. She is credited with restoring the company’s position as a market leader. Under her guidance, the company has added five new offices and is now the largest independently family-owned real estate firm in Massachusetts, with 45 offices from the North Shore to Boston, Cape Cod and the South Coast.

Carol Bulman • CEO and President, Jack Conway & Co.

Diana Cataldo • Co-owner, Cataldo Ambulance Service Inc.Cataldo Ambulance Service, established in 1977, is now in its second generation of ownership, serving 15 Greater Boston and North Shore communities. Diana and two siblings share management responsibilities and maintain family values in a rapidly changing health care environment. The company’s annual charity golf tournament has raised more than $150,000 to fund cancer research.

Sharon DiMinico • CEO, Learning ExpressLearning Express began in the early 1980s as one small store in Massachusetts and now has more than 130 retail franchises nationwide, selling the best educational toys and products from all over the world. Sharon DiMinico has utilized the franchise business model to enable others to create successful businesses, empower-ing other women managers to grow personally and professionally

SPOTLIGHTWINNER

SPOTLIGHTWINNER

SPOTLIGHTWINNER

19

Jack Conway & Company, Inc. is proud of our CEO Carol Bulman, and her selection as an Outstanding Woman in Family Business.

From the North Shore of

Boston, through the South

Shore, Cape Cod and the

South Coast, Jack Conway,

Realtor is the largest locally-

based, family-owned

independent real estate

company in Massachusetts.

w w w . j a c k c o n w a y . c o m

Your Neighborhood Realtor Since 1956

Beginning her career at age 13, Joanne Flynn has a lifelong love of golf. She has held her current post in the family business since 1995, and has led the Windham Country Club through an $8 million construction of a new facility and has achieved an average 85 percent customer retention rate. The Windham Country Club offers a free summer golf program to members of the Boys & Girls Club of Greater Salem (New Hampshire), and works with an inner city golf program for youth in Lowell (Massachusetts), and serves the Greater Boston area.

Joanne Flynn • Director of Golf, Windham Country Club

Cecelia Fraser • President and CEO, Fraser Engineering Co.Cecelia Fraser took on the leadership role from her father in 2009, in difficult economic times, at the company her grandfather had founded in 1950. Her leadership has resulted in steady revenue growth and significant projected revenue growth. She participates in a variety of philanthropic and business-related organizations, including The Fraser Burn Center at Mass. General Hospital, the Associated Industries of Mass. and the Young Presidents Organization.

Aviva Sapers became her fa-ther’s boss and continued the reputation and level of excel-lence of Sapers & Wallack into the third gen-eration. She has led the family-owned executive and

group benefits, retirement plans, wealth management and insurance company for more than 15 years. Her community affili-ations include The Commonwealth Insti-tute, the Boston Estate Planning Council, The Combined Jewish Philanthropies of Greater Boston, and the Presidential Ad-visory Council for the Berklee College of Music.

Aviva Sapers President and CEOSapers & Wallack

Continued on page 20

SPOTLIGHTWINNER

SPOTLIGHTWINNER

SPOTLIGHTWINNER

20

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Outstanding Women 2200114

DED ICATED TO NEW ENGLAND FAM ILY BUS INESSES

The Inaugural Continued from page 19

Harmony Horse Stables, owned by the Cecere family for more than 25 years, has been voted best in the Metro West for Equestrian Riding School for the past six years. Kathryn Cecere instructs students in all aspects of equine care, from competition to basic care on the road. Of more than 1,200 students, many have advanced to national competition levels. Harmony Horse Stables also hosts numerous fundraisers for families in need.

Kathryn Cecere • Owner, Harmony Horse Stables

As Fern’s Country Store celebrates its 10th anniversary, Robin Emerson has been called the glue that holds it to-gether. After a long career in advertising, in which she learned and developed many business and branding skills, she co-manages Carlisle-based Ferns Country Store and allied businesses, and makes the business an active participant in many community activities in its home base.

Robin Emerson • Co-Proprietor, Ferns Country Store

Valerie Bono combines success with creativity, driving sales to record levels, while moving the company to a new facility in 2014. She took the business over from her father in 2007 and brought her sports and teamwork experience as a Division 1 level ice hockey player to bear in expanding the company to more than 40 employees, and its lines of business into new products. She also co-founded the Next Generation Affinity Group, in affiliation with the Family Business Association, to prepare next-generation family members for significant roles in their families’ businesses.

Valerie Bono • Owner, Golden Cannoli

21

NEW HAMPSHIRE – MANCHESTER | PORTSMOUTH | CONCORD MASSACHUSETTS – WOBURN

McLane.com

Congratulations to Joanne Flynn

A 2014 Outstanding Woman of Family Business

Massachusetts Family Business Magazine.indd 1 8/11/14 5:22 PM

Jennifer Verrill Faddoul helped bring the business from a “you-pick” operation to its first farm stand in 1995, and sub-sequently added a bakery and kitchen component, creating jobs and adding space. When the business was reorganized, she was added as a partner. Today Verrill Farm is operated as a partnership between Stephen and Joan Verrill and their daughter. It consists of about 200 acres in Concord and Sudbury, with 100 acres of prime farmland and 100 acres of wildlife habitats, woodlands and wetlands.

Jennifer Verrill Faddoul • Partner, Verrill Farm LLC

Michele Kolligian represents the second generation in the company her father and uncle founded 51 years ago. She and three siblings now own and operate the company, which distributes premier HVAC products throughout New England. She leads the human resources segment, orchestrates customer events, including an annual sales incentive trip, and is the customer liaison within the company. Her volunteer work includes the Armenia Library and Museum and the Advisory Council of the Family Business Association.

Michele Kolligian • Senior Vice President, Distributor Corporation of New England

Heidi Lehner is the only woman of all her siblings and cousins who is actively involved in the family business. She has been at the forefront of making difficult decisions and changing the course of the company, which has experienced increased profitability in recent quarters, and can now focus on additional growth through new product lines or acquisitions.

Heidi Lehner • Chairwoman and Director, Leigh Fibers Inc.

Faith Pulis took over operations in 2004 as the third generation to manage an enter-prise that started in 1951 as a children’s summer day camp. Her father grew it into a year-round en-terprise in the 1970s.

It expanded into a fitness club in the 1980s. She has led the business through an $8 million construction of a new facility. The camp has an average 85 percent cus-tomer retention rate. Faith is a corporator and member of the Auxiliary at Emerson Hospital.

Faith PulisPresident and CEO, The Thoreau Club & Camp Thoreau

Continued on page 22

22

Edward D. Tarlow, Esq.Chairman, Family Business Practice

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Family Business

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Appointed president of the company 10 years ago, Karen Soderberg successfully cultivated the Hispanic market long before it was recognized as a growth demographic. Today over 30 percent of the company’s more than 3,000 clients are Hispanic. She joined the business after graduating from college with a major in Romance languages, specializing in Spanish. The acquisition of the CPCU gained her the recognition within the business, at which she is the main producer.

Kathryn Soderberg • President, Soderberg Insurance Services

Harvard Realty, established in 1964, has a historical knowledge of the local real estate market. Rhonda Sprauge’s nominator, her daughter, credits her with instilling an interest in real estate and says her grit and market knowledge make her successful year after year.

Rhonda Sprague • President & Broker/Owner, Harvard Realty

Cheryl Taylor manages 14 offices and more than a half billion dollars in annual sales, leading her company to become one of the top 10 agencies in Massachusetts, and one of the top 10 franchises out of more than 2,400 in the franchise system. She has served on the board of directors of the National Association of Realtors and on the Massachusetts Association of Realtors Agency Law Task Force, which created new consumer disclosures for real estate.

Cheryl Eidinger Taylor • Chief Operating Officer, ERA Key Realty Services

Continued from page 21

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The Warren Group280 Summer StreetBoston, MA 02210

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