Keeping Security in the Family

At a time when it can seem like cold, faceless corporations control American lives, it’s refreshing to know the security installation business remains a stronghold for “mom-and-pop” operators. Indeed, second- and third-generation progeny are discovering it’s not their father’s electronic security industry anymore. They have taken the torch and are making their family businesses burn brighter than ever.

While larger, nonfamily enterprises typically have deeper pockets and consequently several inherent advantages, family-run entities tend to enjoy greater loyalty among employees and customers, and are usually more flexible in terms of altering business plans and adapting to changes in the marketplace. These factors can help “the little guy” slay the giant.
However, it’s not easy. In addition to coping with barriers specific to the nature of a family-run organization, these businesses must contend with the same universal concerns as standard operations. As a result, although the chances may be slightly better in this industry than most, the vast majority of family-run companies do not make it past the first generation.

“Family businesses face unique issues not experienced by their nonfamily controlled counterparts,” confirms Michael Jones, president of San Diego-based ProFinance Associates Inc. “Many businesses are founded with hopes of passing it on to children and grandchildren. Unfortunately, the odds are not high. Successful hand-offs from the first to second generation occur less than 25 percent of the time and the odds fall to just in excess of 10 percent for the second to third generation.”

Undeniably, the rewards of starting and operating a family business can be tremendous. However, if things go awry it can shred the very fabric of familial relationships. Depending how the business is structured, friction can jeopardize ties between spouses, parents and children, siblings or other relations. Meanwhile, keeping the peace between family and nonfamily employees can be just as difficult.

“Business always puts a strain on family relations,” says James Greco, president and founder of Star Security Inc. in suburban Chicago. “Family members know they must work harder and longer to show other employees they are just as committed and dedicated. Trust can only be built by showing fair and equal treatment to all employees.”

Although family businesses have taken many divergent paths to get where they are today, they share a common understanding of the necessity to adhere to the same sound principles and practices of any other successful business. A balance has to be found that does not compromise the family or the business.

Nepotism must be treated as a bad word and a family atmosphere needs to be inclusive of everyone affiliated with the company. A strong business plan must be developed, implemented and executed based on expert advisors, adequate capital, a clear chain of command, a customer service-oriented culture and quality personnel from top to bottom. In addition, detailed estate, succession and exit strategy is mandatory.

Family Business Roots Grow From Different Seeds

Norman Kaufman was a Brooklyn butcher whose decision to attend an alarm company’s sales pitch in 1960 shaped the future of his family. A friend told Kaufman about a presentation by an alarm business in which they would get a free piece of equipment just for attending.

After a day of chopping and grinding meat, Kaufman and his wife, Phyllis, headed over to hear the company’s spiel. They left the sales pitch not only convinced of the value of alarm systems, but also that they could get into the business themselves. The P.N. Fire and Burglar Alarm Co. – with the “P” standing for “Phyllis” and the “N” for “Norman” – was born.

Kaufman learned how to install systems from books he checked out of the library. After his day job, he began installing systems for friends. It also helped that one of his butcher customers was the founder of ADEMCO, Maurice Coleman. “My father would trade with Maurice, who would give him alarm equipment in exchange for meat,” says Kaufman’s son, Steven Lee. “Maurice would explain to my dad, ‘This is what you need to do, and this is what you need to get.'”

In the late 1960s, the elder Kaufman abandoned meatpacking and moved his family and company to Monticello, N.Y. He and his wife built up the business with him handling the technical side and her running the office. They have since handed the day-to-day running of P.N. off to Steven Lee and his cousin.

The Kaufmans’ story is just one of many in which families have entered the security systems installation business. The origins of nearly every one of them are as unique as the families themselves.

Some company beginnings are planted deep in a family tree’s roots, like Richmond Alarm Co. in Virginia. Samuel Boggs, who was steered toward the alarm industry by a friend after repairing ships in the Norfolk Naval Yard during World War II, started Richmond Alarm in 1947. Today, sons Wayne and Jimmy run it.

Others trace their birth to career changes, like the Bonifas family, which closed its grocery store in 1968 and started up Alarm Detection Systems Inc. (ADS) of Aurora, Ill., or Mountain Alarm of Ogden, Utah, which was started by dairy farmer Peary Barker and is now run by his son-in-law, Rod Garner.

On the other hand, the entry into electronic security can sprout out of a less unexpected progression. Take John Morrow, for example. He began installing alarms while he was a New York state trooper in 1977 and now runs Safeco Alarm Systems Inc. of Kingston, N.Y., with his wife and son.

For those willing to put in the work and dedication, a family’s investment in a business can prove quite fruitful. While it’s true most family businesses do not exist after their founders retire or pass away, the mission of the electronic security industry – protecting people and property – may increase the likelihood a family will stick with it.

Trust and Respect Built by Making All Employees Part of the ‘Family’

The notion that the fastest road to “Easy Street” comes from being a family member at a family-owned company is largely a stereotype. In fact, it can actually be tougher to work one’s way up in a family business when you are blood than when you are not. “There is always jealousy and animosity toward family members from the other employees because they always think the family gets preference,” says Lisa Prosser, president and daughter of the founder of Indianapolis’ General Alarm.

CEO John R. Jennings marks the second generation of leadership at Safeguard Security and Communications in Scottsdale, Ariz. When the younger Jennings joined the company in 1975, he had to work his way from the ground up. He says family members usually have to go above and beyond to gain the trust of co-workers.

“If you are one of the family, you have to work twice as hard to gain half the respect,” says Jennings. “All the family member should have is an opportunity, not a right.” Prosser agrees, recalling, “I defiantly received preferential treatment. My dad preferred to expect far more from me than he did anyone else!”

Trust within an alarm company’s workforce is built upon the fair treatment of employees. “I think many family businesses excel at this,” contends Ed Bonifas, vice president of Sales and Installation for ADS. “They think in terms of the long run and what is best for employees.”

Heirs to Company Throne Have to Work Their Way to the Top

Family businesses don’t work like royal families. A golden crown of leadership isn’t simply passed on as a birthright. While there may be an instant familiarity with another family member joining the company, that doesn’t mean they are automatically bequeathed a large corner office. In this regard, most family-run companies are no different from any company: You have to work your way up.

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