Family-owned enterprises account for a significant portion of the U.S.’s employment, job creation and Fortune 500 companies. In South Carolina, these companies play an even larger role, according to Brad Bechtold, the executive director of Anderson University’s new Family Enterprise Institute of South Carolina.
The institute, which officially launched in January 2020, seeks to provide family-owned businesses the resources to grow and thrive. It’s the state’s only institute dedicated to family-owned companies, joining over 70 nationwide. FEISC has been a strategic initiative with Steve Nail, dean of the Anderson University College of Business, and Bechtold.
“For South Carolina not to have a dedicated resource for family enterprises, family-owned businesses, we’re filling a niche that’s needed,” said Bechtold.
These companies have been shown to help local economies grow and profit. “Recent research has shown that continued family control can be efficient,” said Nail in a release. This is due to the companies’ “ability to apply a long-term perspective allowing for unique strategic positioning, have fewer human resources problems but higher firm values and drive new entrepreneurial activity.”
Unique challenges with family-owned companies
Family-owned businesses face unique challenges that other companies don’t face.
The institute defines a family-owned business as “a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood or marriage or adoption, who has both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals.”
Because of the family dynamics, there can be tension in these businesses. While 70% of family business owners would like to pass their businesses to their children, only 30% are successful, according to Bechtold. It’s compounded now as about 40% of these business owners are expected to retire in the next five years, he said.
Issues that can cause friction can range from a lack of succession planning to individuals not believing they received a fair share in the company.
Sharing best practices across family lines
FEISC has programming planned for its members rooted in the issues that these companies deal with. In the network, companies can share their experiences and work together to strengthen each other.
One example is establishing peer groups. Each month, second-generation family business owners will meet and discuss the issues they are facing and share knowledge and resources. Bechtold said there is a real need for these groups.
“The family institute can be such a benefit,” says Bruce Henson, president of Jennings Dill Mechanical Contractors and a founding family at the institute. “A lot of families don’t realize they’re family businesses. I mean, they have a founder and he worked and the son might have joined or the daughter.”
Henson — who married into the business — says that when he joined Jennings Dill, he had to struggle in the business. He doesn’t want that for his son who has already joined the company.
“I want to network with other family businesses that have been through this, possibly before us. And I’m going to help mentor families that are coming along after us, because, you know, we’ve weathered a lot of storms,” explained Henson. “This just seemed like the right time.”
While based at Anderson University, Bechtold envisions the institute to reach across the state, with several membership level options. Along with the 10 Founding Families to represent the 10 counties of the Upstate, there will also be 46 Framing Families that will represent the counties of South Carolina. Membership at the institute begins at $1,500.
On Sept. 21, the institute will have an official kickoff featuring South Carolina Lt. Gov. Pamela Evette.
Find out more about the Family Enterprise Institute of South Carolina at https://andersonuniversity.edu/academics/business/feisc.
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