The United Fresh Produce Association's Conference and Expo had three panelists and a moderator for its workshop, "Family Business: Building the Future for a Sustainable Business": Greg Corsaro (from left), president of Indianapolis Fruit Company Inc., Leslie Simmons, vice president of Dave's Specialty Imports Inc., Adam Gamble, president of Russ Davis Wholesale Inc., and Henry Hutcheson, president of Family Business Inc. ( Amy Sowder )

CHICAGO — In an industry that’s shaped by family-run businesses, planning for the next era of a company’s future can be rife with deep-seated feelings and complications.

But bad blood can be neutralized if one key word is embodied: Plan. So said the panelists and moderator at the “Family Business: Building the Future for a Sustainable Business” workshop at the United Fresh Produce Association’s Conference and Expo on June 10.

“If you pre-plan, there’s no argument. You can avoid the inevitable battle that could possibly tear your family apart,” said Adam Gamble, president of Wadena, Minn.-based Russ Davis Wholesale Inc. 

The company was founded by Russ Davis and taken over by his son-in-law. They agreed to exclude the third generation and made a plan to sell, he said. Gamble is the non-family member leader of the newer ownership.

The biggest issues in Greg Corsaro’s family business are titles, responsibilities and compensation levels. He’s president of Indianapolis Fruit Co. Inc., which has eight family members involved. 

“(You have) shareholders thinking their child should be in a certain place with respect to the others,” Corsaro said. “Now we’re owned by a private equity group, but before, we had a lot of plans in place.” 

Good plans include rules for buying and selling the company and compensation parameters laid out on paper.

“You have to have honest communication, but sometimes you don’t want to say something because you don’t want to hurt their feelings. That’s a challenge,” Corsaro said.

A solution in telling working family members things they need to hear is to meet with them regularly, such as every 90 days, said panel moderator Henry Hutcheson, president of Family Business Inc.

“You care about each other, but you need to run a business. When you enclose yourself in a room on a regular basis, it gets easier,” Hutcheson said.

You have to keep pushing the things that get uncomfortable, said Leslie Simmons, vice president of Dave’s Specialty Imports Inc. Her grandfather founded company. Today, four family members are involved, including her father, the company president.

Also, it’s important to reach outside the family for help in difficult situations sometimes.

“I can sit in a hamster wheel of indecision, or I can call up someone who’s been through something similar and ask how they handled the situation,” Simmons said. “You can get really stuck with the same thinking. Get in groups, do volunteering. Push yourself to reach outside your family business and ask smart people smart questions.”

A successful transition in a family business needs three things, Hutcheson said:

  • The next generation has to be sufficiently interested and capable or have potential to be interested and capable;
  • The current generation has to be willing to hand it over; and
  • The next generation has to get along well enough together to run the business.

But when considering successors, look beyond the family pool of potential hires, Hutcheson said. “If you narrow down the talent pool to just family members, that can be a problem. You’re limiting yourself,” he said.

A good, neutral resource for figuring out how to pay family members in the business is the United Fresh Produce Industry Compensation Report, a few panelists said.

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