All in the Family

Family-owned businesses share their secrets for success and sanity

By Greg and Cori Sexton

At 15, Buddy Stubbs had his first major ride: a 1954, KHK 900cc, two-wheel rocket he proudly roared around the streets of Decatur, Ill. By the early 1960s, Stubbs was on the racing circuit, eventually winning the Daytona 100 in 1963. Stubbs would seek further adventure over the next several decades doing motorcycle stunts in Hollywood.

Still, perhaps his biggest gamble was opening the first Harley-Davidson dealership in the Valley in 1966. Today, Stubbs owns and operates Buddy Stubbs Arizona Harley-Davidson with his two sons, Frank and Jack. For the Stubbs clan, working together with family has been a natural evolution over the years. And surprisingly, the Stubbs family, like

numerous other Arizona businesses run by family members, has found the experience extremely rewarding with little disharmony and one with great success.

So, what’s the key?

“We communicate with each other constantly, not only about business matters, but also personal matters,” Buddy says. “Occasionally business matters will create tension, but we are always able to make the best of any scenario. Family comes first and always will.”

Like many family businesses, the Stubbs’ have a definitive breakdown of responsibilities — which helps define the business while creating boundaries and clear areas of expertise. For Jack, the transition into family and business was natural.

“We grew up around motorcycles, spending a considerable amount of time at the dealership when we were young,” he recalls. “Since we developed the same passion for the business and industry as our father, it only seemed natural to get involved at an early age.”

And when you throw in the cool factor of working with motorcycles, it is a dream job waiting to happen.

“Who wouldn’t want to be involved with such a great brand and company as Harley-Davidson?” Frank asks. “I love working with motorcycles, people and family every day. It’s an exciting, fun and rewarding job. I couldn’t imagine doing anything else. As a child, my father always seemed to enjoy his job and expressed a passion for motorcycles. We were also taught success does not come for free or without hard work.”

A Green Thumb
Passion and hard work are certainly something Andre Lugo can relate to. Lugo owns and operates The Green Goddess, a nursery and outdoor accessories company that has been around since 1977.

Over the years, Andre has worked with his wife, Claudia, among other family members. Like others, Andre cites “trust and confidence” as key factors propelling the family-operated business.

“You know your backsides are covered,” he laughs.

Andre has also pioneered other successful businesses over the years in the Valley. Still, he notes the challenges and differences family members have had over the years have made every step of the way a learning and growing experience.

“It is a great joy to work with your family,” he says. “I wouldn’t have it any other way.”

A Family’s Best Friend
Ed Marshall started E.D. Marshall Jewelers in 1971, and has since built a solid reputation in the Valley’s highly competitive fine gem industry. Today, Marshall runs his business with his wife and brother. The best part of working with family, Marshall says, is the strong relationship he has with family members.

Marshall says besides working with family, another strategic move his business made was buying and renovating its own building, the Scottsdale Road and Shea Boulevard location he’s owned since 1995. Again, family played a major role in that decision and family continues to grow the business.

“We all get along well, we understand each other and know the needs of the company,” Marshall says. “Of course, trust is a big thing in any business and it’s good to know that your family won’t stab you in the back.”
Life is Like …

James B. Cerreta gets to work every day with his family at the Cerreta Candy Company in much the same way his father did decades ago, growing the business and passing it along to future generations of the clan.

“It’s like a family picnic at the park every day,” laughs Cerreta, who works with his father, James. J. Cerreta, his sister, Jennifer, and his three brothers, Joe, Jerry and Jonathan. “We enjoy each other and we have for all these years. Of course, there are little things that pop up, but because we love each other and the business, we make it work.”

Much like the Cerreta’s story, which began in Ohio in the 1930s with James’ grandfather, Ben Heggy, making chocolate, a family-owned business starts as a dream — an alluring entrepreneurial concept or idea percolating in some form or another. In Arizona, there are thousands of family-owned businesses toiling away each and every day — at the office and at the home and, sometimes, both.

Ernesto Poza, professor of Global Family Enterprise at the Thunderbird School of Global Management, has worked with family-owned enterprises for more than 30 years. He says families often start businesses with the underlying idea of growing a successful company and passing it down from generation to generation. The first generation, the foundation, is usually easy.

“When the kids join is when it gets complicated,” notes Poza, adding that functions are often assigned (i.e., sales, marketing, business development) to certain sons and daughters tackling certain aspects of the company.

Difficulties often ensue during transition periods, when children might want to change the original focus of the co

mpany, or when a parent has to face the fact that perhaps the designated heir may not be up the challenge of running the family business.

Continued

Unconditional Love
While Cerreta is certainly a household name in the Valley, one of the most recognizable business names in Arizona is Bashas’. The family-owned Bashas’ Family of Stores has been around since Ike and Eddie Basha Sr. founded the supermarket and food services company in 1932. At the time, every family member worked for just one market, helping to fulfill the needs of the surrounding community. These days, the company is run by CEO and Chairman Eddie Basha Jr. and Johnny Basha, Ike’s son. Johnny’s first summer job, in fact, was serving as a carryout for Bashas’ when he was 13 years old.

Today, Johnny has moved up from bagging groceries and now steers the cart of the company as vice chairman and senior vice president of real estate for the Bashas’ stores, which include Food City and AJ’s Fine Foods. And it’s not a small feat: Bashas’ is in the top 10 of the largest companies in Arizona with more than 13,000 employees.

Johnny says there are many keys to the company’s success, but at the heart of it all is keeping in sight what really matters: community and compassion.

“These values were instilled in us from the beginning, from our grandmother and family matriarch, Najeeby,” Johnny says. “These values have left an indelible impression on the manner in which our company operates. While so much has changed, our philosophy has remained the same.”

Going Global, Family Style
While globalization of business and consolidation of all form and size continue to dominate the business scene in Arizona and around the world, many might see family-owned firms going the way of the dinosaur. After all, how can nice, family-owned companies with solid morals run with the bulls on Wall Street? Very well, actually, according to family business experts.

Poza believes there has never been a better time to operate a family-owned business.

“Small businesses, including family-owned operations, can succeed globally and, in fact, thrive,” Poza says. “They are nimble. They react faster to market niches and focuses and are able to keep the decisions where decisions can get made — with the family.”

Katie Pushor, president and CEO of the Greater Phoenix Chamber of Commerce, agrees, noting that often, family-owned businesses are usually small at the onset, but with a vision and a passion for a new niche in the market.

“That’s been the story since Adam and Eve opened their first apple stand and it’s still happening in Phoenix today,” she says.

Family-owned businesses, Poza adds, are also able to ride out downturns in market cycles. Family businesses are usually in the game for the long haul and are not consumed by the quick buck, an intriguing idea since the average life of a company in the U.S. is 14 years and the average CEO is in the hot seat for less than three years, according to research cited by Poza.

“There are definitely advantages to owning and operating a family business,” Johnny Basha says. “Since we do not suffer from the bureaucracy of a major corporation, we are able to make relatively quick decisions considering the size of our company. Additionally, given that we are not beholden to Wall Street, we can take a long-term perspective in managing the organization. We can invest in assets that will benefit the company long term, rather than just satisfying quarterly metrics.”

Basha also likes to point to the upside of steering your own ship.

“Each morning, as I enter my office, I am met with the portrait of my father that hangs behind my desk,” he says. “His presence reminds me that my office sits on the same concrete slab as our first grocery store, built by my father in the 1930s. It is a great honor to continue his legacy, and that is by far the greatest reward of operating a family-owned business.”

Keeping it Clean
For Chad and Trisha Belnap, a Mesa couple who have owned and operated their own family business, Pure Flooring, since 2002, the dream of combining small business and family has turned out to be a match made in heaven. The company has experienced nearly 15 to 20 percent annual growth, and like many family-owned businesses, the Belnaps utilize a distinct division of responsibilities: Trisha handles the paperwork and data side, while Chad and his crew handle the day-to-day fieldwork.

“I enjoy being able to have success and being able to share that with my wife,” Chad says. “She gets so excited for me to have the business successes that we both work so hard for.”

Of course, it is not all hearts and flowers. Belnap cites health care and insurance as ongoing challenges. Still, he firmly believes small and family-owned businesses are the bread-and-butter of any economy.

“For long-term growth in any business, someone has to be responsible for the success and failure of the choices that are made by any company,” Belnap says. “I am glad that responsibility lies with me because it affects me and my family the most. The buck, literally, stops with me.”

Joan Koerber-Walker, CEO of the Arizona Small Business Association, notes that many of her members are family-owned and report they feel such pressures as access to capital, access to technology and health care concerns. Still, these are a challenge for all businesses. When you throw in the family element — the drama, the sibling rivalry — it becomes all the more complex. There also needs to be aline to draw in the sand, Koerber-Walker adds.

“Business doesn’t make good pillow talk,” she says. “Not only do family-businesses need to focus on the business, they need to focus on the family. That’s a huge challenge.”

At the end of the day, though, business is business and family is family. For veteran business owners such as James Cerreta, it continues to be a recipe — much like his chocolate — for success.

“It is a wonderful experience working with your family,” he says. “It’s important to realize a family and a business can operate simultaneously. But it is important to keep a focus on the business at hand. There are, after all, priorities in life.”