SD-based association helps businesses 'keep it in the family'
SIOUX FALLS, S.D. – A company owned by a husband and wife, both of whom were getting on in years. An assortment of children and other relatives. An uncertain inheritance-tax and business environment.
And then, a catalyst: a retreat on transition planning, organized by the Prairie Family Business Association, an outreach program of the University of South Dakota.
From that 2008 retreat, a stronger Lloyd Companies of Sioux Falls emerged, one that not only remains family-owned but also has leveraged multiple family members’ talents into growing the 165-employee firm, company officials say.
What would have happened if the association had not offered the retreat?
“I’m pretty sure we would have sold the company,” said Christie Lloyd Ernst, Lloyd Companies’ senior vice president for property management.
“I mean, I really am, because of my parents and our family’s circumstances at the time. But because of the work we accomplished at that retreat, today we’re not just talking about transitioning it to my generation, we’re looking at how can we make this a true legacy that we can pass onto future generations.
“I think the Prairie Family Business Association saved our business at the end of the day.”
From its office in University Center in Sioux Falls, the association with its three-person staff plans meetings, sponsors workshops and organizes other activities to help owners meet the unique challenges of running a family business.
“We serve South Dakota, North Dakota, Iowa, Nebraska and Minnesota, and we’re the only association like this in this part of the country,” said Laura Schoen Carbonneau, executive director.
“We really focus on family businesses, which means providing resources and education so that they can continue to grow and flourish, and especially so that the families can hand down that business from one generation to the next.”
Accomplishing that transition is much easier said than done. That’s because a family-owned business is – well, family owned, Schoen Carbonneau said.
“If you’re the owner, then you’re working with your parents or your children or your cousins or your grandchildren. You have all of these family dynamics that come into play that you typically don’t have in a traditional business setting.
“And some of those dynamics are positive, while others can be a bit of a challenge to work through.”
That’s where the association comes in. Over the course of its 25-year partnership with USD, the association (which now counts 206 members) has thrived by targeting its services to family-owned businesses and their specific concerns.
Moffatt Products in Watertown, S.D., is one such company.
“We’re a 64-year-old manufacturing business,” said Dave Moffatt, company president.
“My dad started the business in Minneapolis in our basement. Today, we have second and third generations working in the business and loads of Generation Four grandchildren.”
Moffatt’s father, Dillon Moffatt, was an original sponsor of the Prairie Family Business Association at the organization’s founding. But the company and the association lost touch until 2014, when Dave Moffatt’s own sons expressed interest in joining the company.
“I was excited to discover that the association had become exactly what my father and others had envisioned: a practical, broad-based group, one that’s dedicated to family businesses and has very reasonable membership fees:
“We dove into everything and have been doing so ever since.”
The association’s services include:
- The annual Family Business Conference in Sioux Falls and North Dakota Business Forum, which rotates between Fargo and Bismarck.
At the Sioux Falls-based conference in April, a sellout crowd of more than 300 spent two days attending talks and workshops on such topics as Succession and Estate Planning, Family Relationships in Family Businesses and Building the Advisory Board of Your Dreams.
- Affinity peer groups. This unique and confidential service is one of the association’s most valuable, said Ernst of Lloyd Companies, who’s also a member and past chair of the association’s advisory board.
An affinity peer group is a group of about five to eight association members. The group members meet periodically with each other and a professional advisor. The point of the meetings not just to talk about what’s going on in the businesses, but also to dig into each family’s dynamics, find answers and learn from each others’ experiences.
“I’m in an affinity group, my mom has been in one and my younger sister is in one as well,” Ernst said.
“It’s tough to talk about what’s going on in the business with my husband, because I don’t really want to bring all of that home. And there’s no one at work you can talk with, except for your siblings.
“And you can’t really talk about your siblings with them, either!” she said with a laugh.
“So the group gives me an outlet to work through some of the things that you deal with in a family business. It has been a huge part of the association for me.”
- Family business retreats. These intense, two- or three-day experiences see five or six families gather at an area resort, along with a facilitator for each family.
“There’s a keynote speaker and then breakout sessions with your own facilitator to work on your own family’s issues,” said Moffatt of Moffatt Products.
“It’s very intense, but also very productive, as it’s tailored to your own family and business.”
In his family’s case, “our facilitator said we’d be pushing fast forward on our transition planning, and that’s exactly what we did,” Moffatt said.
“We broke through into discussions that we just hadn’t been having, and we developed our vision for the next few years. We accomplished in one weekend what it would have taken 18 months to get through.”
- Live case studies, in which family-business owners meet with a group of professional advisors – attorneys, accountants, business strategists and the like – for high-level analysis and advice.
- Plus classes, webinars, awards and other services for members.
Through its work, the association helps families keep their companies – and in doing so, it helps communities keep those families, Moffatt said.
“If you think about it, we’re constantly talking about the brain drain in South Dakota, about educating our children and having them leave the state,” Moffatt said.
“The association helps create a way for these local businesses to stay in the family and to thrive. As a result, that next generation of of leaders is more likely to stay.”
To sum up, the Prairie Family Business Association “is an amazing resource with a phenomenal staff,” Moffatt said.
“It enhances the ‘family-ness’ of your business, which is a force you can harness to be uniquely competitive. You can see the results in your own business right away; and through successful transition planning, those results can last for all time.”
Editor, Prairie Business