A Family Affair

Business partners often talk about the struggles they face trying to maintain continuity, especially when they don’t agree on certain company issues. Finding common ground is critical for moving the business forward, but when the partners are family members, there’s often more at stake than just the company’s well being.

Whether it’s a husband/wife team or two siblings sharing ownership duties, business partners who are related must often overcome the emotional ties that bind them together to make sound business decisions. Achieving such stability can become even more challenging when multiple family members are all equal owners in a company. That’s the situation at Maxalea, a Baltimore, Md. landscape design/build company, where five members of the McWilliams family share ownership responsibilities.

The company began in 1929 when brothers James, Robert and George McWilliams began selling sod in the Baltimore area. In 1946, James McWilliams and his wife, Marion, opened a nursery called Mac’s Azaleas, which was eventually shortened to Maxalea. The business was later passed on to James and Marion McWilliams’ sons, Don and Jack, who formed a landscape-contracting firm. In 1998, the third generation of McWilliams purchased the company, which at that time had grown to approximately $3 million in revenue. The company is now a $7.3-million operation with more than 80 employees.

For the most part, common goals and interests have helped keep this current ownership team operating smoothly. But there are times when disagreements occur, which is why the team has decision-making procedures in place. The owners also do not hesitate to look outside the company for help. In 1999, the company hired a consultant to help the new owners decide whether to close Maxalea’s garden center, says Executive Vice President Jim McWilliams. “In the third generation, my older brother was the last of the five current owners to realize that the retail garden center had to go,” Jim McWilliams recalls. “Having an outside consultant look at our business was really the deciding factor.”

Jim McWilliams, 41, is one of the five current Maxalea owners and oversees the company’s sales staff. Lawn & Landscape magazine spoke with McWilliams about how the company has continued to progress with multiple owners steering the ship.

What are some of the biggest challenges of working with so many family members, and how do you overcome them? There are five owners, and although we all have pretty much the same common interest, the goal is to funnel that interest so that we are all going in the same direction. In 1999, we brought a consultant in from Chicago and had him assess our business. We sat down with him and he interviewed us, as well as key personnel who are within the company. He thought we were beating a dead horse with the retail side of the business and that it wasn’t enabling us to focus our attention on the landscape design, contracting, maintenance, carpentry, lighting and irrigation end of the business. We needed someone from the outside to look in and say, ‘Hey this is what you need to do.’ He worked for us and this allowed us to evaluate our various positions and personnel and helped us to reorganize as to take advantage of each individual skill set we had here. He also helped us set up a pricing model and an operating budget. I think that process was a turning point for us in terms of having someone come in and help us set up systems that we could all agree with and follow.

Why didn’t the garden center work out? I think it didn’t work out because of our location. We’re not on a major thoroughfare, and customers only knew about that part of our business by word of mouth. When we talked to most people running profitable garden centers, they said it’s all about location, location, location. They were near major traffic arteries, and we’re near residential neighborhoods. The final factor was pressure from Home Depot, the Lowe’s and Wal-Mart. They were branching into some of what we were selling and taking away our customers. In the end, closing the garden center was the best decision for us.

Does sibling rivalry ever come into play at your company? It’s not a factor at all. We all have different talents and expertise in different areas. That’s what makes us unique and unusual. Most of us have our own clients because we’re each designing or selling a different facet of the business, so that’s helped keep some separation there.

What are some of the benefits of working in a family business? The biggest benefit is knowing there are trustworthy individuals to back me up in any situation. I am able to take a vacation and know my partners will keep things operating smoothly. If any one of us has a personal issue to deal with, others will cover for him – no questions asked.

How do you make decisions with five owners working together? The majority rules on a major issue. If one does not agree, he still has to support the others. No one is allowed to undermine the decisions that are made. We have titles such as president and vice president, but we have majority rule on any major issue. 

What is the process for deciding on issues? Do you vote on them? We do. We actually evaluate the pros and cons of all major decisions. And I think the biggest decision goes back to closing the retail part of our operation. That’s probably one of the biggest decisions we had to make together. We had someone who had been here for more than 35 years as an owner and grew up with that part of the business, and it was tough to push him, in essence, over the fence. Having that outside person come in and run the hard, true numbers showed that individual that it doesn’t make sense to continue to upgrade that part of the business. Since then, we’ve had a plan that we all agree upon. It’s a five- to 10-year plan, and we have followed it. We’re now trying to agree on the amount of growth that we should achieve each year. We also rely upon support staff to give us their thoughts and ideas. Other people have decision-making powers and keep us informed of the impact of various decisions. We have three or four individuals helping us with issues on a daily basis. We also have professionals who support us from outside the organization, ranging on issues from insurance to accounting. These individuals provide expertise within particular fields and share experiences from other companies in the same industry.

What’s the purpose of your weekly Monday night meetings? These meetings are very important to us. Every Monday the owners convene to review minutes from the previous meeting. At many of the meetings, our operations manager and our financial officer also attend. We look through our accounts and review where we are financially and talk about production issues. It is a roundtable format. Everyone participates. Major decisions are made here. Meetings generally last one to two hours. Concise minutes are taken and e-mailed following the meeting. We elect one person from the group to take the minutes. These minutes have proven valuable as a source for recording decisions and actions to be take. You would be amazed at what can be forgotten in a short period of time. Our minutes are our record of activity.

What was your parents’ strategy behind transferring non-business assets to children who weren’t in the company? There are two sisters in the family who are not involved in the business. They were when they were younger but chose not to take it up as a profession, so some insurance policies were purchased for them to cover them from any value they would get but no ownership of the company, so they don’t have any ties to the business. It was because advisors had told that generation that there had been and would be problems if something wasn’t written up ahead of time. We heard about it in our own dealings with other companies about how siblings not involved in the company all of the sudden had an interest upon the death of an owner. But that’s no longer a factor because we bought the business from the second generation.