YOUR BUSINESS AUTHORITY
When Ken Stephens shows up to work at the company he co-founded, Employee Benefit Design LLC, a couple of familiar faces are there to greet him: his daughter Kimberlee Nevins, 32, an account manager, and his son Drew Stephens, 26, a producer.
They call him Ken in the office, and once or twice, Drew has slipped and done so at home, only to have Kimberlee playfully call him out.
Ken, 62, was just out of college when he started selling insurance plans.
“It started out very slowly,” he said. “It was five years before I hit a comfort level. Nobody wanted to talk to a 22-year-old kid.”
That was in 1997.
Drew and Kimberlee had very different starts with Employee Benefit Design. Both were fresh out of college and looking to start careers.
“I said, ‘Get over here. You can work for me until you figure it out,’” Ken recalled.
By now, both of his children have figured out the business, Ken said – and then some.
“That’s the most rewarding part about this job is being knowledgeable to the point where people want to come and seek out your advice,” Drew said.
Ken said his succession plan has “a lot of moving parts.” For one, he has a business partner, Chance Potts, who he said does a lot of work with independent contractors. Ken focuses on helping businesses with custom benefits packages and compliance plans. He said he appreciates the continuity of having his children on staff.
“I’m near to slowing down, but I still enjoy what I do,” he said. “I’m super glad to have them. If I decide to slow down, I can rely on them more to run my practice with me not being there all the time.”
Baby boomers like Ken are retiring in the millions each year.
In its report “Boomers in Business,” Guidant Financial found that boomers – those 76 million Americans born 1946-1964 – make up 41% of small-business or franchise owners. That’s 2.3 million companies. And boomers represent the most successful sector of business or franchise owners, with 78% turning a profit.
At Employee Benefit Design, a family succession plan is one possibility.
“Any parent wants their kids to be happy, whether working for you or working somewhere else,” Ken said. “It’s great that they are happy working here so I can be involved in their life and talk to them and see them every day.”
Only 30% of family businesses make it to a second generation, according to the Conway Center for Family Business, an Ohio-based agency that provides resources to family-based businesses. Some 10%-15% make it to the third generation, and 3%-5% make it to the fourth. Within these family businesses, 40% of owners plan to retire, but of those planning to exit within five years, fewer than half have selected a successor. The U.S. Census Bureau reports 58% of small-business owners do not have a succession plan.
The idea that family succession is the natural order of things is antiquated, said Joe Howard from business brokerage firm the Kingsley Group. For most business owners, the company represents the largest portion of their wealth, and it is often their only option for retirement savings.
“Society has changed,” Howard said. “Back in the ’60s and ’70s, if you had a family business, it was a natural thing – the kids took it over and everyone did their thing. It’s more complicated today.”
Nowadays, succession of businesses to family members is not the norm, and that’s for multiple reasons.
“As parents, we want our kids to be independent – we want our kids to do what they want to do,” he said. “Thirty or 40 years ago, we didn’t do that.”
Howard said he has sold several businesses that included owners’ children on staff.
“One business in particular, there were two kids that were absolute key employees. Every person I showed this business to said, ‘Why are the kids not taking over?’ They’d been in it since high school; it was the only job they ever had,” he said. “Mom and dad didn’t want to hand it over to them. They didn’t think they could run it.”
Jeven Russell was a year old when his father, Jeff, started Russell Cellular Inc.
Jeven, 30, didn’t intend to take over Russell Cellular, though he was interested in owning and managing a business. He started working in the warehouse in high school. As time went by, he tried other roles in the company and became a buyer in 2011.
“I found an opportunity – something I can enjoy, be good at and make a difference at,” he said. “I found a passion for people leadership.”
Jeven and Jeff are now co-presidents of the wireless retail operation, which has over 800 stores nationwide.
Jeven has been tapped as his father’s eventual successor, and this has been communicated to other leaders in the organization, he said. At the moment, however, Jeven is just enjoying working with his dad and his sister, Layton Alsup, who has a vice president role at the company.
“It has been fun,” he said. “If Jeff decides to step away, I know I’ll look back on this time as the funnest part of my life.”
Bryant Young is director of business development as well as the heir apparent at Insurors of the Ozarks, a company started by his father, Greg, and his grandfather.
Succession was not a given for Bryant. When he was ready to graduate from the University of Arkansas – with a year of experience as a licensed insurance agent for State Farm – he approached his parents about joining the business.
“My parents looked at each other – I think they’d already had the conversation,” he said. “My mom basically said no. She said I needed to learn how to have a boss that wasn’t my dad.”
So, he stayed on with State Farm for 18 more months until changes in early 2012 created a natural vacancy in his parents’ company, and he finally had a chance to make that move.
Bryant said his father has been an agent for 41 years and has been very successful at it – but Bryant brought new insights with him when he returned.
“I got the exact thing they wanted me to get out of it,” he said.
Still, there’s no getting around the fact that the father-and-son dynamic informs their working relationship.
“We can be way more candid with each other, for better or for worse. There’s less pulling of punches,” Bryant said. “It didn’t take very long for us to learn I will say a lot of things to my father that I wouldn’t say to a normal employer, and vice versa.”
Bryant, 34, said an associate who had been with the company for 28 years pulled him and his dad aside shortly after he started.
“She said, ‘If you’re going to disagree, that’s fine, but you’re alienating people in the office,’” he recalled with a bit of a laugh. “I like the fact that we have that kind of relationship with people in the office, that they can be open like that.”
And the openness served the company well, Bryant noted, as the father and son did tone things down for the benefit of company culture.
Bryant will have been with the agency for 11 years on April 1. “My first day was his 30th anniversary,” he said.
The irony of father and son both starting on April Fools’ Day is a source of amusement – kind of a shared family joke.
“It’s kind of by design,” he said.
When family is together, office stuff stays at the office, he said.
“We try to keep a little separation of church and state,” he said. “The rest of the family thanks us for it.”
Downtown flower shop Funky Flaura’s Unique Floral Designs LLC opened; Jordan Valley Community Health Center moved in Republic; and The Jackson Grille got its start in Marshfield.