Old Port businesses navigate family dynamics
You can’t peruse the streets of Portland without stumbling upon a family-owned business. In the city, as well as Maine as a whole, these businesses are "the rocks beneath the economy," says Gina Weathersby, executive director of the nonprofit, Institute for Family-Owned Business. "Family businesses make up a whopping 80 to 90% of all businesses in North America; similar numbers apply in Maine," Weathersby says.
A number of family-owned businesses in Portland’s downtown are transitioning to their next generation of ownership or doing more to bring the younger family members into the fold, according to Janis Beitzer, executive director of Portland’s Downtown District.
Joseph’s, a family-owned suit shop, takes up 3,000 square feet of space, making it the largest store in the Old Port, according to its owners. Joseph Redman and his 25-year-old son, Julian, run the business together, and bring different styles to the shop.
"Julian is much more focused on trends and research than I have time to be. It’s been a very positive relationship from that vantage point," says Redman. "He’s learning merchandise and the store has never looked better in terms of the interior. We’ve gotten tremendous accolades from people who come from all over the world. He’s been a big part of that."
Julian recently graduated college with an art degree, a creative background that comes in handy adding a hip, urban feel to the store’s racks, says his father. He's also pitched innovative business ideas that Redman says increased profits and varied customer demographics -- for example, adding denim.
Even so, Redman notes his artistic eye sometimes needs more direction. “He has great integrity, but I’m trying to teach to be less of an artist and more of a merchant” by teaching him to focus on a line’s quality, price and salability.
Initially, Julian wasn’t at all interested in working for his father, but began accompanying him on clothing buys to New York City about three years ago.
“I have more stake in the store and want it to succeed,” says Julian, adding, “It’s not just a job working for my dad now.”
Even with their success working together, Redman says he’s “not pushing for Julian to take over.”
Julian is considering owning a smaller shop where he can focus on different products, or a career in graphic design.
According to the Institute for Family-Owned Business, this situation is in line with the national trends: in any 5-year period, nearly 40% of family businesses will hand the keys to the next generation, but only 40% of those businesses survive to the second generation. Twelve percent make it to the third, and 3% to the fourth.
The institute says the "reasons are ubiquitous." Among the key issues it points out: younger family members choose to head in a different direction than the business. In other cases, families may disagree on what ideas will lead to long-term sustainability.
For retailers Sage Eskesen and her daughter, Olive Jones, differing opinions are what keep the store appealing to all audiences. They run Se Vende Imports, a specialty retail store selling hand-crafted jewelry. They buy their wares from places like Morocco, Turkey, Israel and Nicaragua, and opened the store in 2008.
"Your taste changes as you move through life, so with both of us choosing items for the store we are able to appeal to more people," says Jones. "I don’t think I could do this with anyone else. I trust my mother and I know her very well. Those things help facilitate everything else," she adds.
The DiMillos On the Water ownership team consists of 12 family members of varying ages, scattered across Portland running its restaurant, property, parking lot, marina and yacht sales.
Manager Steve DiMillo says it’s an advantage having a multigenerational team leading the different business areas. “The younger members of our management team think differently than the senior members. Where the senior managers will err on the side of caution when it comes to making changes, the young managers will be bold in their decisions,” he says.
“Recently at a menu meeting, we were hesitant to eliminate an old favorite and replace it with a new, more contemporary entree. The younger manager made the point that both seasoned customers as well as a younger customer will like the new entrée, so why not try attracting both demographics?” A younger manager’s decision to add a tent for functions has increased event bookings, he adds.
The third generation of DiMillo’s On the Water consists of Steve’s two children, Steve Jr. and Chelsea. DiMillo says he never intended for them to work in the family business.
“I thought after seeing me work long hours, including nights and weekends, they would gravitate to a more mainstream line of work,” he says, noting Steve Jr. did work in sales at Idexx prior to realizing he wanted to be a part of the family team.
DiMillo says he works to balance guiding his children while also giving them decision-making authority. He plans to someday pass on the majority of the management work to his children and take a part-time role. “You have to let go of command for the company to move forward,” he says.
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