Family Business and the American Dream

Family Business and the American Dream
The Keller family, image courtesy of Jim and James Keller

This content is brought to you by the Family Enterprise Case Competition (FECC), the world’s only case competition focused exclusively on family business.

Jim Keller spent more than three decades as a senior executive in the Weyerhaeuser Company where he managed containerboard packaging and recycling. His work brought him into contact with small and medium-sized family businesses all over the United States. Today, he runs a consulting company, Green Mountain Business Consultants, which helps SMEs maintain a competitive advantage by incorporating the latest techniques and innovative technologies.

Jim’s son James, an alumnus of the University of Vermont, is used to looking at entrepreneurship from the inside out. After graduating, he honed his business practice as an analyst and equity trader with his own company, which has now joined Tocqueville Asset Management. Currently, he is in the first stages of growing a herbal tea start-up, Headwater Teas.

Recently, Tharawat Magazine had the opportunity to sit down with Jim and James Keller to discuss their passion for family business education, the beginnings of a whole new family-owned startup and the American Dream in a digital economy.

Family Business and the American Dream
Jim and James Keller (L-R), image courtesy of UVM Grossman School of Business

What sparked your interest in family businesses?

Jim: I spent 35 years in a multi-billion-dollar corporation before retiring and embarking on a second career as a consultant. Over the course of my first career, I became involved with various small, medium and large family-owned businesses.

I developed a lot of close relationships through my work, acquainting myself with businesses run by the second, third and fourth generations. In many cases these were successful farmers.

Eventually, it made sense that I became a consultant, enabling clients to access resources that they otherwise wouldn’t have. My passion for family business comes from seeing the real and immediate impact these resources generate.

Is the American Dream realistic and how do modern family businesses play into it?

James: Reflection on the modern American Dream requires an examination of the role family businesses play in the modern digitised economy. I’d like to reiterate the importance of innovation and agility – qualities that define a family business.

The younger generations of a family business are likely more tech-savvy. Taking advantage of the next economy means figuring out how to use social media as a tool for growth and a gateway to new markets. Family businesses have a leg up because they can leverage next-generation family members who already have the skillset required to digitalise.

Family Business and the American Dream
Jim Keller, image courtesy of UVM Grossman School of Business

Jim: The latest job statistics indicate that the US economy has done well recently in terms of growth and job creation. Those big multinationals are not creating jobs – it’s the SMEs and entrepreneurs generating this growth.

Starting a new business is daunting. Entrepreneurship requires the commitment of resources, time and effort into something that is not guaranteed to succeed. If the market is not there, the venture will fail.

That’s where a lot of what’s called the American Dream comes into play. It’s not hard to start a business, but it’s hard to keep it going. Nevertheless, family businesses persist – many are able to stay competitive and sustain multigenerational success. In this way, the American Dream still exists, and family businesses play a central role in its realisation. 

James, after years of working in finance, you recently made the decision to start a business with your family as well. What motivated you?

James: My passion stems from the overarching entrepreneurial drive we often see family businesses exhibit. I developed this sense during my earlier work in investment banking.

Recently, I started a herbal tea company called Headwater Teas, which began as a strictly non-commercial attempt to develop a home remedy for my allergies. My approach was simple: infuse high-quality organic teas with liquid herbal extracts. The results were encouraging.

I received a lot of positive feedback from my friends. Next, my wife and I developed a tea to help support our immune systems. We stayed healthy even when our daughters fell sick this winter.

Unintentionally, I became cognizant of this niche opportunity after many years of considering starting my own business. Initial estimates showed the market for tea in Jackson was sufficient to support a start-up, and the hard sales figures bore this out.

Jim: It truly is a family business because his wife is involved with the packaging and visual branding, among many other things.

James: Absolutely, and these are skills that I lack, so ours is a highly complementary partnership.

Family Business and the American Dream
James Keller, image courtesy of UVM Grossman School of Business

Have your own experiences as an entrepreneur coloured your view of other businesses? 

James: I have nothing but respect for people who go down this path. My initial intent with Headwater was to start a small tea company on the side. Since then, however, Headwater has developed to the point where it requires a significant amount of time and effort.

Jim: Any undertaking of this kind can present a steep learning curve. I’m glad I’ve been able to answer a few of his questions and give him some advice.

I believe there is a correlation between his journey and the crucial role family business plays in the United States’ economy. James found a niche, which begs the question: what are the market requirements that are not currently being filled by a large corporation?

That’s one of the real strategic advantages family businesses have over larger companies. They are free from the bureaucracy and top-heaviness that often hamper corporations. As such, they are able to act quickly when they see an opportunity.

You touched on the difference between starting a business and sustaining that success in the long term. What characteristics differentiate the two?

Jim: The fundamental difference boils down to financial resources. James can attest to the fact that it doesn’t take much money to start a small tea company. However, growing a business requires significant investment.

People often underestimate the tremendous amount of working capital required to build inventory and deal with accounts receivable. Several factors can quickly push a new business to the point where financial resources start to become real constraints.

James: Even though we have a low unemployment rate, great employees are still available. Generally, people are not an issue. It’s the lack of money that tends to hold new businesses back when it comes to diversifying and growing geographically. Simply put, the difference is capital.