Hank Williams Jr. used to sing about "Family Tradition" decades ago, and that seems to be the case for those who own finishing and coating operations.
Most of these shops are family-owned, and some are into their third and fourth generation of ownership, which is extremely rare.
About 40% of U.S. family-owned businesses turn into second-generation businesses, and about 13% are passed down successfully to a third generation, according to the U.S. Census. Only about 3% go to a fourth or beyond.
Here's another interesting nugget: the average life span of a family-owned business is 24 years, according to Forbes magazine. The reasons seem obvious: children and grandchildren may not want to go into the finishing and coating industry, which often requires long hours, deep pockets, and a stomach for sometimes the worst of business practices from customers.
All of this was why I was eager to moderate a recent panel at the Chicago Midwest Chapter of the NASF annual conference, where several shops and suppliers took part in a panel discussion on past, present, and future succession planning.
Bales Metal Surface Solutions President Stacey Bales, Accent Metal Finishing President Doug Mangino, Haviland Enterprises President Meg Post, and Gatto Industrial Platers Chairman George Gatto Sr. were all very open about discussing the succession processes they went through over the past several years.
Our cover story for the October 2022 issue details some of what happened to all of them, and you will quickly see how transitioning ownership in a family business get be good, bad, and downright ugly.
It seems like an easy process; statistics show that upwards of 70% of small business owners prefer to have their children or other family members take over the operation. But yet, only 15% ever truly accomplish that, according to research studies.
Small businesses are the key to the economy of the U.S. They are overwhelmingly who hire employees in this country, and the small businesses — many of them family owned and operated — are the backbone to keeping everything humming in our country.
Unlike most business transactions, dealing with family — and sometimes an owner's own children — can be a very personal and daunting task. I've had a few 2nd and 3rd generation owners tell me how they paid a small fortune to buy their parent's finishing and coating business, and they felt a heavy burden from their parents and other family members to do so. Oftentimes, selling the family business is the only retirement package most owners have.
I hope you enjoy reading some of the comments from those in the article about their passage to the succession of the family business. It was eye-opening to me to hear some of these stories, but I had heard so many like them privately from others in the industry that I was somewhat prepared.
Hats off to the family-run finishing and coating businesses in the U.S. and those who have successfully transitioned ownership. I'm sure it makes a "joyful" holiday gathering.
Tim Pennington is Editor-in-Chief of Finishing and Coating, and has covered the industry since 2010. He has traveled extensively throughout North America visiting shops and production facilities, and meeting those who work in the industry. Tim began his career in the newspaper industry, then wound itself between the sports field with the PGA Tour and marketing and communications firms, and finally back into the publishing world in the finishing and coating sector. If you want to reach Tim, just go 
