Not every third generation wants into the family business.
Aaron Wiegel is not every third generation. In fact, he and his siblings -- sister Erica and brother Ryan -- have Wood Dale's Wiegel Tool Works Inc., humming.
Contact information ( * required )
The formal transition began in 2009, but the process might have started when Aaron, the oldest of the three, was in eighth grade. "All my buddies were getting dropped off to go to the movies or work at the mall," Aaron says. "My Dad said to me, 'You might as well work for us, learn the value of money.'"
The pattern was set: Every summer and Christmas break through college, Aaron worked in the family business.
Although the Wiegels have faced the tax and control issues that many transitioning families face, the transition seems reasonably smooth. Aaron gives credit to his father, Martin. "My Dad had seen a lot of failures," Aaron says. "He took a lot of notes."
Even so, Aaron says the transition "was a struggle. Everyone felt they deserved an equal part of the pie, and we had to overcome those feelings." The solution: Each sibling owns one-third of the company, but Aaron has decision-making authority.
"We took different paths" into the business, explains Aaron, who is president. "My sister's path paralleled mine, but my brother was never here" during high school and college.
Ryan is part of the business now, however -- and gets credit from Aaron for shepherding a 20,000 square foot addition to the business. "He's one of my best project managers," Aaron says.
There was a bit of a dust-up when Erica "was battling for president. So I said, 'Come and sit with me. I'll train you in all the things I do.'
"She hated it," Aaron says. Today, Erica is corporate secretary and, more importantly, prototype manager.
The family, Aaron says, "is very solid. We know our roles and responsibilities, and we talk business all the time. We have the right infrastructure."
Aaron's grandfather, Otto, opened the business on Dec. 6, 1941. When he died, ownership went to his wife, Kathe.
"My grandmother was very frugal. She wanted the financials sent to her in Florida every month," Aaron says. Her frugality, common in that generation, ultimately led to tax problems.
"Estate taxes were a big issue," Aaron says. Accountants had advised gifting and similar tax-avoiding steps, but grandmother's frugality won.
"Dad had to pay a lot of taxes."
Dad learned from the experience. A skip generation trust is in place, Aaron says, and a family trust invests in capital equipment that the business leases.
If there's a weakness in the Wiegel Tool Works transition, it's that there is no plan for the fourth generation. There's no fourth generation yet either. Expect the Wiegels to be ready.
• Jim Kendall welcomes comments at JKendall@121MarketingResources.com.
© 2012 121 Marketing Resources Inc.