As a 10-year-old boy, Matt Horsfield understood much of what was unfolding around him when his father, Pat, decided to start a construction business.
Now, as an adult and president of his father’s firm, Horsfield Companies, Matt Horsfield said he realizes how substantial his father’s undertaking was.
“Essentially, he gave up everything and sacrificed everything,” he said.
All of it hinged on a hope that the father of five could make a go of his construction business by depending largely on his reputation and his work.
Pat Horsfield said it was an intense leap to take, co-signing away his home and farm as a 46-year-old family man with lots of mouths to feed.
“It was very, very nerve-wracking that first year. I had to put a lot of things on the line,” he said, adding that it also was an uneasy experience for his wife, Verla.
“I went from having a paycheck to going out and trying to create a paycheck,” Pat said.
The building business is in the second generation of family leadership, with two of Pat’s sons, one of his daughters and one of the siblings‘ cousins all working for the company. And Pat touts their work ethic as one of the primary reasons for the company’s success.
“Myself and the boys, we’re here every day. I have one nephew that we brought into the company and he’s out every day. I think that’s what made us grow,” Pat said.
“It’s very tight-knit and it’s been that way since we started,” he said.
Family businesses remain the backbone of the nation’s economy, making up more than 60 percent of both the U.S. work force and 60 percent of the gross national product, according to Barbara Spector, editor in chief of Philadelphia-based Family Business Magazine.
“Family businesses have been around since Cain and Abel. They’ve outlasted a lot of countries, a lot of nations,” said Spector. She asserts the benefits of a family business are numerous, from spending the day with loved ones to carrying on a family legacy.
And, from a marketing standpoint, a family-run business also is helpful, Spector said, noting the success of the “SC Johnson: A Family Company” advertising campaign. “Customers generally prefer family businesses rather than faceless corporations,” she said.
They tend to be more profitable as well, with family businesses posting an average 10 percent profit margin, up from 8 percent for non-family businesses, according to a 2006 study authored by Jim Lee, an economics professor at Texas A&M-Corpus Christi.
Still, taking on a family business means venturing into risky territory.
The firms statistically don’t last very long, with 85 percent not making it past the first generation, according to Lee’s study.
Another potential danger, Spector said, is allowing arguments to carry over into the workplace.
Parent-child working relationships can be strained as well, often forcing family members to give up traditional roles.
“They have to learn to delegate and let go,” Spector said.
Operators of family-run businesses can run into snags when people are not appointed to positions they are qualified for or when a company refuses to change.
“A family shouldn’t blindly stick to its legacy,” Spector said. “You have to be able to innovate.”
Pat said family conflict has rarely, if ever, been an issue in the company and Matt added that the members of the second generation of Horsfields have found their appropriate niche within the business.
Having weathered several industry storms, the concept of growth is not new to the Horsfields, as the company is in the midst of a Ready-Mix concrete plant expansion.
And since Pat started off in one of the toughest construction markets the area has experienced — the early 1980s — he appreciates how difficult the market is now.
“The construction end is tough, tough as it’s ever been,” said Pat, who knows how to run every machine the company owns and continues to fill in wherever he can.
And Matt, the youngest of the family siblings, said a family-run business lends itself to a natural partnership that couldn’t be reproduced, no matter how many employee training sessions leadership puts on.
“Your business partners are people you’ve known your entire life,” he said. “There’s a tremendous level of trust there that you probably wouldn’t have with anyone else.”
As for the next generation of the business, Pat said he’s still unsure what will happen next since there don’t appear to be any third generation family members interested in the business.
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