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Family Businesses Are Vital to the Capital Region and State

Back Commentary Sep 30, 2019 By Tom Couzens

My first real job — one with a paycheck with taxes deducted — was at the Crab Claw in Ocean City, Maryland. It was a summer job busing tables, and I most likely landed it because my father, a prominent architect, was acquainted with Mr. Higgins (we never called him Ed, of course, but some could be overheard calling him Old Man Higgins, though he was barely 40 at the time).

One of my favorite memories about that job was the family that owned it (certainly not the crab-seasoning smell that couldn’t be washed away). Ed and his wife Barbara managed the place, and all four of their kids worked there that summer. In a sense, the Higgins had many more kids — they treated all their young employees like family, asked about our parents and siblings, how we were doing in school, what our goals were.

Ed and Barbara have passed away, but the family business continues, albeit under a different name. One of the sons, Bobby, now owns the two Higgins Crab House locations in Ocean City, with a combined seating of about 1,000, he says. “This has been a very busy summer,” Higgins says.

That job was the first of many at family-owned restaurants that helped me pay my way through college. My first job after graduating from college was for a family-owned newspaper in my hometown, and for many of my 33 years at The Sacramento Bee, it was owned by the McClatchy family — from James in 1857 to C.K., who as CEO took the company public in 1988. 

It’s likely we’ve all either worked for or even owned a family business. According to the Family Business Association of California, there are 1.4 million family-owned businesses in the state, employing nearly 7 million people. The nonprofit organization says family businesses in the U.S. generate 57 percent of the nation’s gross domestic product, employ 63 percent of the workforce and create 75 percent of new jobs.

Despite the number of family businesses, the FBA says there isn’t a standard definition across state and local jurisdictions, which leaves policymakers without accurate data when implementing policy issues such as estate succession, an important consideration for family-owned businesses. 

“Family businesses are important to California,” says Robert Rivinius, the executive director of FBA, whose board of directors includes prominent business owners in this region (Ken Monroe of Holt of California, Dave Lucchetti of Pacific Coast Building Products, Grant Deary of Nor-Cal Beverage and Carol Burger of Burger Rehabilitation, among others). “We want family businesses to be recognized by the state.”

Rivinius, whose organization has been advocating for family businesses at the state Capitol for seven years, says only 30 percent of family businesses survive into the second generation, 15 percent into the third and fewer than 5 percent into the fourth and beyond. 

One bill sponsored by FBA is SB 483, which was carried by state Sen. Richard Pan, D-Sacramento, and would define family owned as:

  • privately held by one individual or two or more related individuals, or a partnership of entities owned by related individuals
     
  • headquartered in California
     
  • in operation for 10 or more years
     
  • one that demonstrates an intent to continuously operate as a family-owned business in the future

The bill passed in the Senate on May 2 on a unanimous vote, and was sent to the Assembly, where it was assigned to the Committee on Business and Professions. It stalled there, however, making it a two-year bill, meaning Pan will take it up again when the Legislature reconvenes in January for the second year of the two-year session.

We agree with Rivinius about the importance of family-owned businesses. Comstock’s has reported extensively on family-owned businesses since its inception in 1989, and we continue that tradition with this issue of the magazine. We begin planning months in advance, and the decision about which of the Capital Region’s thousands of family-owned businesses to feature is difficult. Our goal is to bring diversity to our coverage in the type and size of businesses.

After much discussion among our editors, we decided to feature these six family-owned businesses: Dimple Records, Z Specialty Food, Sacramento River Cats, Bardis Homes, Huston Textiles Company and Yolanda’s Tamales. We’re also featuring three family businesses in our Taste column, and one in our In the Making photo feature.

We hope you enjoy these stories as much as we enjoyed meeting these families and reporting and writing about their livelihoods and how they are building for the next generation.

Tom Couzens
Executive Editor

Comments

Jody Rasmussen (not verified)October 3, 2019 - 9:28am

Family-run businesses are unique settings. Just as your experience demonstrates, employees can and do become the "extended family." It amazes and delights me when potential new hires apply because one of their parents "used to work here." Denio's has been the "first job" of many; it has been the extra income earned in retirement for many. And, it's vendor base has spawned many vibrant business in the region after honing their business skills in the weekend market. As 2020 approaches, Denio's will be celebrating 73 years in business. The cohesiveness of our second generation ownership and third generation managers along with our "non-biological" family members working together to continue evolving the business and assuring the solidarity for future generations of family, employees, vendors and customers is true recognition of the philosophy of our founders, Jim and Marilee Denio. Thank you for continually celebrating family-owned businesses!

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