Orlando Business Journal – by Melanie Stawicki Azam, Staff Writer

Nathan DeVault, 34, doesn’t talk business at home, despite running marketing and public relations firm Costa DeVault with his mother-in-law, Linda Costa.

His young daughters, ages 2 and 4, simply won’t stand for it. “The girls have made talking about work at home impossible,” he said with a laugh. “They demand 100 percent of our attention — and talking about the office is not that interesting to them.”

Fortunately, DeVault and Costa both agree it’s better to leave work at the office. “We work hard at cutting it off here and not bringing it home,” said Costa, 61.

Not separating family from business is one of the pitfalls many family business owners try to avoid, but it’s a challenge.

That’s because a family is a forever relationship, centering around loyalty, harmony and relationships, while business is more conditional, focused on goals, competence and growth, said Greg McCann, director of Stetson University’s Family Enterprise Center. “So it’s hard wearing those two different hats. Separating those roles is the tough part.”

A successful multi-generational family-owned business goes through stages, said McCann. The first stage revolves around the leader and personal goals. Tension can enter in the second phase, where the business is getting organized more professionally, yet still feels family-run. The final stage phase is driven by what’s best for the company, and the family conforms accordingly.

Another key pitfall of a family-owned business is not having a succession plan. McCann spoke recently at a trade association’s national convention, where only one of about 60 family business owners had a succession plan. There’s a lot of emotional resistance to succession planning, but that can lead to not preparing the next generation properly and businesses failing, he said. Having a clear succession plan also can head off family squabbles.

Scott McCurdy, co-owner of Coastal Reconstruction Group, has a succession plan in place. That’s important because his son Lucas and son-in-law Creston Leifried, plus three sons of his business partner Don Brewer, all work at the firm. Started by Scott McCurdy’s father, O.W. McCurdy, Coastal Reconstruction rebuilds structures damaged by fires, hurricanes and other disasters in 19 states.

McCurdy and Brewer set the company up as a trust that owns the business to ensure one person doesn’t have too much control and everyone has to work together, he said.

Costa began to think about succession planning about 10 years ago, when it was evident her daughter and son had other interests and wouldn’t work for the business she founded 25 years ago. She was glad her son-in-law wanted to join the firm, because she preferred to keep it in the family and had been worried she’d eventually have to sell the company.

Family businesses also have to deal with how to say no to hiring an unqualified family member and how to determine how much to pay family members and still grow the business. McCann said financial matters can get muddy and emotional real fast, so it’s best to professionalize that issue and compensate a family member based on work and hours. For example, employees working at a corporation can’t just give themselves a raise or promotion if they need an addition on their house — and members of a family-owned businesses shouldn’t do that either, he said.

Both Costa and Scott McCurdy said they expect family members to work as hard as other staff and be compensated comparably for the work they do. Costa said DeVault brought a lot to the business, doubling revenue during his nine years with the firm.

Husband-and-wife team Jon and Betsy Hughes said their 20-year-old son Chris, who’s still in college, also has an interest in the family business, the Track Shack, which was founded more than 30 years ago. But they don’t plan to hand their son a top management job straight out of school at the Orlando-based retail store specializing in running shoes, apparel and other supplies. He needs to learn all aspects of the business, including the unglamorous side. “If you don’t feel like you can clean the toilets in your own business, you’re probably not ready to have your own business,” Betsy Hughes, 49, said. “That’s what we tell our son.”

McCann said many pitfalls that doom small businesses happen, because family involvement isn’t managed well, there is a lack of proper planning and the next generation isn’t well-prepared and empowered to take the reins.

“What’s amazing is practically every culture has a saying that by the third generation, a family business fails,” he said. “Some great entrepreneurs don’t always make good parents.”

To start a business and get it off the ground, the founders often worked long hours and sacrificed. Their children saw their struggle, so they typically work hard to grow the company. The third generation can walk into a mature business, which is a bit cushier of a position. But McCann said it’s important that life isn’t made too easy for the third generation —they need to develop character and work hard to know and grow the business — or the company eventually could head for trouble.

Lucas McCurdy, 30, said it was a big decision for him to join the family business. After college, he spent seven years building a real estate career in South Carolina. But he wanted to be close to family in Orlando, so he joined the family business a few years ago. He co-runs the sales team with his dad and is director of business relations.

His time away from the family business allowed him to gain outside work experiences and skills — plus it proved to him that he could make it on his own.

Ultimately, McCann said it’s important to manage family involvement and professionalize matters in family businesses. After all, “not managing it is the stuff of movies, lawsuits and headlines.”

mazam@bizjournals.com | (407) 241-2895