By: Marie Ratermann on March 15th, 2023
A Legacy of Success: Nurturing a Family Business through Generations of Passion, Planning, and Innovation with Jack Butler
Family businesses are the backbone of the economy, and the gas industry is no exception. Jack Butler, whose family has been in the gas business for generations, shares some valuable insights on how to manage a successful family business in this industry.
Growing up in the gas business, Jack was not aware of how involved he would become in the family business until their twenties. Their grandfather, dad, and brother all owned gas companies, which gave Jack a unique perspective on how family businesses can be successful.
One of the key factors in their family's success was early planning on family business and ownership. Jack advises other families in the industry to get ready for the transition of ownership and to have regular family meetings to ensure everyone is on the same page.
Their family also had written rules in place for minority stockholders who wanted to cash out, which allowed them to sell their shares if they wanted to. This allowed the majority shareholders to maintain control of the company while providing a fair exit for minority shareholders.
One of the most important lessons Jack learned was the value of staying in the right circle by not discussing family problems. They also learned a lot from mentors and networking with industry peers.
Jack distinguishes between two kinds of family companies they learned about at the University of Pittsburgh. There's a family first company that helps the family first and a business first company that makes money for the family. They advise families to have voting and non-voting stock, and only certain people should be able to buy their stock.
In a business first family company, a stockholder's child can be transferred from one generation to another. Jack encourages children to be passionate about business and to bring a unique skill set to the table. They also recommend paying market wages for owners coming in.
Another important lesson Jack learned was to let everybody be heard, even if it means letting go of family members who do not have the passion for the business. They believe it's important to treat everyone with respect, even if they don't own the company.
When it comes to competency, Jack believes it's important to let go of those who do not have the necessary skills. Many people in the industry own a small percentage of stock, which makes it difficult to pass on. They advise getting in early and taking on important projects to build skills and confidence.
In conclusion, Jack's experience in the gas industry offers valuable insights for families looking to build successful businesses. By planning early, having written rules in place, and treating everyone with respect, family businesses in the industry can thrive for generations to come.