California’s seven family business centers (including two in the Capital Region) are committed to addressing the needs and challenges of family-owned companies.

However, all are registered as 501(c)3 organizations, and as such are precluded from lobbying activities.

This lack of representation at the State Capitol on matters uniquely tied to family business was the driving force behind the creation of the Sacramento-based Family Business Association in October 2011. According to executive director Robert Rivinius, the statewide association’s mission is to: provide incentives for family businesses to create jobs and invest in California, propose initiatives for needed change, defend against unfavorable legislation and regulations and take legal action to protect family business.

Rivinius recently sat down with Comstock’s to share insight on some of the association’s goals and challenges as well as emphasize the positive impact family businesses have on our state’s economy.

“Our research shows there are 1.4 million family businesses in California. Out of 17 million civilian employees in this state, 7 million work for a family-owned business.”

“Not all small businesses are family businesses, and certainly not all family businesses are small businesses. One of our founding member companies, Raley’s, has 14,000 employees. The [National Federation of Independent Business] represents most small businesses. The state chamber mostly represents the bigger businesses. And while we’ll be a coalition partner with both groups at times, we’re here to watch out for the interests of family owned businesses, specifically the things that will impact the succession of a family business from one generation to the next.”

“Our reason for being really boils down  to the succession stuff. From personal tax to inheritance tax to property tax, family businesses are uniquely challenged in this arena versus any other kind of business. Being able to pass the family farm down without triggering a reassessment of the whole business is a huge deal. Really, a federal deal. Too often, when grandpa dies, the family has to sell off a third of the farm just to pay the inheritance tax. That’s just wrong.”

“Only 34 percent of family businesses make it to the second generation. Seventeen percent make it to the third generation. Four percent to the fourth.”

“Family-owned businesses are less likely to lay off employees, almost to a fault. Research shows they are more apt to promote women, and they are very philanthropically active in the community.” 

“In my humble opinion, family businesses are the backbone of our economy.  I haven’t found anybody at the State Capitol that doesn’t love family businesses. As Jack Kemp once said, ‘You can’t love jobs and hate employers.’ And family businesses have proven to be the best of employers. They are more likely to expand and more likely to stay put, not move out of state.”