How to beat the odds as a family business
Phil Rose is president of Roman Electric Co., a third-generation family business that provides electrical contracting services for industrial, commercial and residential markets, along with commercial and residential plumbing and residential heating and cooling. Rose offers advice of how to beat the odds when it comes to passing the family business on to the next generation.
“Only 3% of all family businesses make it past the third generation. Not great odds when making a career choice to join a second-generation family business. Here are three suggestions to help beat those odds: Get some relevant work experience outside the family business, obtain some additional education and work in the family business before you try to run it.
“That advice proved to be critically important to our business. The need for new methods and technologies was evident from the day we joined our family business. It was clear that what served gen 2 would not be sufficient in gen 3.
“When my brother and I joined our family business in the ‘90s, we brought in additional construction and engineering experience along with an MBA. We were able to help the company focus on the design/build market and change its focus from ‘growth at any cost’ to controlled growth in targeted markets. We also started to focus on cash flow and not just revenue and profit. The best advice I ever received was from a mentor. He said, ‘Financial losses are weathered every day by businesses. It’s poor cash flow that will take a company down.’”
Roman Electric Co.
Industry: Electrical contracting