A Family Making Sweet Business Tunes
Cost-effective ways to enhance the brand include strong social media and LinkedIn (LNKD) pages, as well as strong search engine optimization using Google Analytics, Shinick says.
The company's traditional focus on Catholic schools implies at least one slowing growth avenue, given that many are closing from lack of tuition. Shinick suggests expanding the user base.
Offering the service to public schools may be difficult, though Shinick says it is not an idea the company should rule out. However, demographic groups ripe for music education are seniors and Asian communities, typically known for encouraging instrument music playing amongst their children.
With a business as successful as Paul Effman Music Service, one of the most important issues that family-business experts point to is that of succession planning."It's much more than just the legal estate planning," says Otis Baskin, a consultant with The Family Business Consulting Group and a professor emeritus at Pepperdine University's Graziadio School of Business and Management. "It's all about how they are going to keep this one very valuable asset together because that's where the potential to generate future wealth for the family is as it grows. And so it so important that they keep it together and are able to work together as owners of the enterprise, not just as managers of various assets," Baskin says. "Every so often I hear parents [who say] 'Well, we haven't gone through succession. Our kids love each other and they're smart people and they'll figure it out.' That's a time bomb," Baskin adds. Creating a formal governance system by establishing a board of directors and holding quarterly meetings with specific agendas is a good first step. "It's really a good best practice to start now where dad could be the chairman and really make it work now while he's able to take that leadership. That will get the kids talking to each other at a different level, as owners, not as managers of different enterprises," Baskin says. Another part of the succession planning will have to involve distribution of profits. Currently, all of the company's profits are reinvested in the business. Succession planning is a sensitive topic for the family. Hutch declined to give details other than saying that everyone will be provided for in the event that something happens to his parents, but the specifics are "a work in progress." "There is a general consensus of myself and Lou being in charge and Jesse and Justin running Hyson and Lucy running the office in Long Island," Hutch says. One thing the family is clear on: there are no plans to sell the business and no plans to raise money through public or private investors. The company has no outside investors. Since his kids and Lou have taken over running the business, it has freed Paul up to return to his roots of playing and teaching music. Two years ago he created the Paul Effman Cocktail Band that plays in local restaurants and vineyards. He also comes to the Syosset office weekly to give private lessons. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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