Family-business ranking only says so much

Egan Printing Co. is a Denver institution with a 120-year history and a 21st century slogan: “Limitless paper in a paperless world.”

The fifth-generation family business on Elati Street in Denver was founded in 1891. Nine family members still work there, including two pairs of Egan brothers who lead the company today: Bill and Joe Egan, and Howard and Steve Egan. A photo on the company’s website taken in 1907 shows founder Thomas Egan with four other men in front of the store, believed to be 1316 Larimer St., though even company executives can’t be sure about that because the company moved around a lot in the early days.

Despite this rich history, you won’t find it among our Top 50 Family-Owned Companies (see the complete list). That’s because Egan Printing Co. has only 20 employees, and that is what the ranking happens to be based on. Ken Zetye, the son-in-law of co-owner Howard Egan, voiced his frustration about the shortcomings of our ranking criteria – and I’m sure he spoke for a lot of family businesses – when he e-mailed me back in December.

“I’ve submitted our entry for the Top 50 Family-Owned Companies, but I’m not optimistic,” said Zetye, whose responsibilities run from purchasing to human resources to facility management to sales. “We have nine family members working here, and we are more than well known in our industry for our service, quality and dedication. However, all of that is not worth a thing when your ranking is by number of employees. Why use such an arbitrary measure of a business that has nothing to do with how healthy, long-lasting or effective a company is at producing goods, services or profits?”

Well, Ken, because ranking companies in terms of healthiness or effectiveness would be even more arbitrary. But Zetye’s frustration is understandable, and like I said, he no doubt speaks for a lot of family businesses that are upstanding but don’t employ many.

We introduced our Family-Owned Companies ranking in 2002, opting to rank businesses by number of employees rather than annual sales because a lot of family businesses are reluctant to share financial information. A look back at that first list gives you an idea of how family businesses have come and gone: The No. 1 company in 2002, Coors Brewing Co., merged with Molson Brewing in 2005, and thus ceased being a part of the list because a single family no longer controlled ownership.

No. 3 Gart Sports merged with Sports Authority in 2003 and took on the Sports Authority name. No. 13 A.B. Hirschfeld Press, a regional presence since 1907, closed after more than a century of business spanning three generations in 2009, citing difficult economic conditions. No. 20 Orange Glo International, which Max Appel launched out of his Littleton garage in 1986 and first sold at state fairs, was acquired by Church & Dwight for $325 million in 2006.

No matter what size, family businesses that endure for multiple generations are rare. Fewer than 30 percent of family businesses make it to a second generation, and only 10 percent survive to a third. Some simply aren’t profitable; others are bought out; would-be heirs often aren’t interested in carrying on the family business. One longtime family business you will find ranked – and profiled on page 24 – is Johnson Storage & Moving Co. At 111 years old, it is the oldest company in the ranking and has been in the Johnson family for four generations, currently run by brothers Mark and Jim Johnson.

When their great-grandfather Will Johnson founded it in 1900, the first Model T was still nine years away. Early moves were made with horses and wagons, usually for passengers arriving at Union Station with heavy steamer trunks that needed hauling. Now based in Centennial, the 350-employee Johnson Storage & Moving has evolved in ways the Johnson brothers say would be inconceivable to their great-grandfather, a blacksmith who sensed the end of his livelihood was near when he heard the first steam car roll down Broadway and promptly announced to the family he was launching a moving business.

Four generations later, it’s still here. As is Egan Printing Co., after 120 years and five generations – even if it’s not in our Top 50 ranking.
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Categories: Company Perspectives