Spokane Journal of Business

Guest Commentary: Family-owned businesses susceptible to regulatory pains

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During the 1992 presidential campaign, then-candidate Bill Clinton famously intoned, “I feel your pain,” reassuring voters he understood what they were going through. Since then, similar statements of empathy have become a staple for politicians. But it doesn’t always ring true for every constituent.

Take family business owners, for example.

Family businesses account for 50 percent of U.S. gross domestic product, generate 60 percent of the country’s employment, and account for 78 percent of all new job creation, the Conway Center for Family-owned Business reports.

Most elected officials have no idea what it’s like to put their life savings on the line 12 to 16 hours a day, scrambling to make ends meet. Those families risk everything to meet payroll and invest in new equipment for state-of-the art facilities in spite of waves of new government regulations, taxes, and fees.

One politician who got that first-hand experience was former U.S. Senator and presidential candidate George McGovern.

In a 1992 Wall Street Journal column, “A Politician’s Dream is a Businessman’s Nightmare,” McGovern described his experience running a Connecticut hotel and conference center. He ultimately went bankrupt, a failure he attributed in large part to local, state, and federal regulations that were passed with good intentions, but no understanding of how they burdened small business owners.

Deeply affected by his failure, McGovern became an advocate for regulatory reform and lawsuit reform, saying, “I … wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day.”

While politicians often tout their support for family-owned business, they are the least understood and most overlooked political constituency.

Family-owned businesses are America’s economic backbone.

According to the University of Vermont, there are 5.5 million family-owned businesses in America. Nearly 60 percent of all family-owned businesses have women in top management.

More than 30 percent of all family-owned businesses survive into the second generation, but only 12 percent will still be viable into the third generation.

One third-generation Washington family thriving is Dick Hannah Dealerships, in Vancouver. It started in 1949 when William Hannah opened a Studebaker dealership.

In 70 years the Hannah’s have taken calculated risks by expanding into multiple new and previously owned car and truck dealerships in the Vancouver-Portland region. In addition, Dick Hannah added injection molding manufacturing of auto parts and auto body repairs.

With his son, Jason, and daughter, Jennifer, they just opened a multimillion-dollar, state-of-the art collision center in Vancouver. 

Just as Hannah strives to satisfy customers completely so they will return, that is the hallmark of successful businesses. That’s one way small family-owned businesses compete with large corporations and their vast resources.

In the end, if customers feel valued and are treated right, they return. Those are values which entrepreneurs, not government, create, but which elected officials can hamper if not understood.

Don C. Brunell is a business analyst, writer, and retired as president of the Association of Washington Business. He lives in Vancouver, Washington, and can be contacted at theBrunells@msn.com.

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