- 5 weeks ago
We spoke with three families who told us what it really takes to inherit and keep a family business alive, from a decades-old Chicago barbecue sauce brand, to a Greek bakery, to one of the last fabric-flower businesses in New York.
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00:00Use that clapper.
00:02Action.
00:02I inherited my family business.
00:05Let me start over.
00:06I inherited my family's business,
00:07and I am a second generation owner.
00:09Our company, MS Schmalberg, is a fourth generation
00:12family owned business.
00:14What is it like working together as a family?
00:18It's chaotic.
00:19We all had to adjust.
00:21You had to adjust with seeing us as co-workers.
00:24There are disagreements.
00:25Sometimes one family member pushes for something,
00:29whereas the other pushes for something else.
00:31Trying to get someone who has been doing something for a while
00:34to do something different.
00:35That can be a challenge.
00:37Who would you say is more conservative with money?
00:40Oh, that's a loaded question.
00:42I think my dad took bigger risks.
00:44First of all, just launching a product back in the 1950s
00:48was a risk.
00:49The most important thing is dedication, working hard.
00:52Inheriting the business means to me creating a family legacy
00:56and making sure that it gets passed on to the next generation.
01:02My father worked it.
01:03I worked it.
01:05And Adam's working it.
01:06That's the only way the legacy will go on.
01:13So tell us about Contos.
01:16Who's answering that?
01:17You can, I mean, you want me to answer it?
01:19You can answer it.
01:19Ask the question again.
01:21Contos Foods started 38 years ago as a baker of flatbreads,
01:25pita breads.
01:27We continue the family tradition for nearly 100 years
01:30in the baking industry.
01:32The business started in 1916 by two brothers,
01:36Morris and Sam Schmalberg.
01:39My dad actually started mumbo barbecue sauce in 1950.
01:42We take fabric and turn it into flowers and leaves and petals,
01:47as we have done for the past 109 years.
01:51My dad came to Chicago from Indonola, Mississippi.
01:55During the Great Migration, when black folks
01:57were moving from the south to Chicago
02:00and coming to the city to try to find a better life
02:03for themselves.
02:05On a sales call in Seattle, Washington, he goes,
02:08kid, you're from New York.
02:10Can you get me 200 cases of Greek pita?
02:13There were only two bakeries in the country
02:16that made Greek pita at the time.
02:18I was like, wow, what a business.
02:19That's how I zeroed into it.
02:21So the whole idea behind mumbo sauce
02:24was to create a product that could be used
02:27on all types of meats, all types of dishes,
02:30and on all types of food.
02:32We grew up very conservative.
02:34My father couldn't pay the bills at times.
02:37Ah.
02:38All right, it's time to work.
02:40Another day at the office.
02:43My father took me to work to try
02:45to keep me out of trouble.
02:46Yeah, it didn't work, but I took to the business.
02:49I knew the business.
02:51My mom actually says that I started working
02:52as early as four years old.
02:54She would put phone books on a chair
02:55to sit me up at this table.
02:57And my job was to scoop out coleslaw with a spoon
03:00and put it into a little cup and put a little cup on it.
03:03From when I was, like, really young,
03:04I was always involved.
03:05I think my first food show, I was underage.
03:09You were 13 years old.
03:10Yeah.
03:10It was something.
03:11It was all my salespeople go, wow, she's got it.
03:19One year, my dad, who had never had a cold
03:22that I could remember, became sick.
03:26And I just started thinking about if my dad decided to retire,
03:29if my dad, for whatever reason, could not run the businesses
03:35anymore, what would happen?
03:37I was working for a bunch of years, and my life wasn't really,
03:41I didn't have any real direction.
03:43It's like, where am I going to be in 20, 30 years?
03:45I worked at a few other places beforehand
03:49because I wanted to get some more experience
03:52outside of the business.
03:53I remember talking to a friend of mine.
03:56He said, do you really understand what your dad has done?
04:01It was kind of the first time I thought about legacy.
04:04And I thought, you know, you can't just go away with my dad.
04:08I had a moment where I called my dad and asked
04:11if I could come work for him.
04:12And his response, as it should have been, was,
04:14why would you want to do that?
04:15We're not making any money.
04:16I don't even think I could pay you.
04:18I didn't say, Dad, I'm going to quit my day job,
04:20and I'm going to join the family business.
04:23But really, over a course of a year,
04:26I just started thinking about how I could prepare myself
04:29if I wanted to do that.
04:31To be honest with you, I really had to pray.
04:33I had it always in the back of my mind.
04:35They liked the business.
04:37Demi and Evan selected to come in.
04:41The first couple months of working there,
04:43it was just kind of me coming, learning what I could.
04:46I remember the push guards, I remember the garment racks,
04:48and I remember the energy, people yelling at each other.
04:51I would get anxiety just walking the streets.
04:56The year that I decided to step in on a full-time basis was 1992.
05:05He was a little shocked, but then he was excited.
05:08You know, he was happy that one of his kids
05:11wanted to take over the reign.
05:13In the beginning, you were a little weary.
05:15Yeah, in the beginning.
05:17He was like, what are you doing?
05:19But, um...
05:21Can't do that.
05:21Yeah, can't do that, can't say this, don't do that.
05:24He thought the walls were going to fall down,
05:26but somehow we're still here.
05:28Um, never thought that.
05:33When my dad passed away in February of 2002,
05:40took some time to get over the grief,
05:42but understood that he had left me something valuable.
05:46I don't know why I'm getting emotional.
05:54I just wanted to make him proud.
06:02I don't think there's ever been a time where we looked at each other and said like,
06:05wow, this business is now generating wealth for our family and we can count on this.
06:11I think it's been a constant stream of ups and downs with evolutions and pivots and figuring things out.
06:17My whole life, flour traded at $12 to $15 a hundredweight.
06:22And then in 2007, I think it was, flour prices went to $50 a hundredweight.
06:28That really shook the baking business.
06:33And, uh, so, and we had to shut down everything or else we were going to shut down as a company.
06:38So we, uh, we stopped taking paychecks until we got through that hurdle, which took about nine months.
06:45The 2008 financial crisis was a big deal.
06:50People were losing their homes.
06:52People were tightening their budgets.
06:53When people had these economic issues or faced with these economic issues,
06:58they're kind of really thinking about how they're going to spend their money and how much.
07:02During COVID, for example, folks were not able to go and dine at restaurants.
07:06I remember when COVID happened and we were sitting at the kitchen table one day and he's like,
07:10I'm inflation-proof, I'm deflation-proof, but I don't know if I'm pandemic-proof.
07:16Yes.
07:16That was a really crazy time.
07:18It was, but we, you know, we...
07:20But then we, three weeks later, we were back.
07:22Yeah, we figured it out.
07:23Yeah.
07:23We had to go after the takeout guys.
07:25Yeah.
07:25New York City Garment District was the fashion capital of the world.
07:30And you fast forward to today and we are the last domestic manufacturer of artificial flour.
07:35We'd go to the stores and we'd see racks of garments with a copy of our flour.
07:39We'd go, no, we never got the order.
07:40What happened?
07:42Made in China, made in Vietnam, made in Sri Lanka.
07:45When my dad was ready to retire, he did lease some of his restaurants,
07:50but then ultimately we just decided that it was just best to
07:55divest of our restaurants, sell the properties.
07:58And, you know, my dad can take a break and I would just focus on the manufacturing part of it.
08:09There's a lot of different parts to keeping the business profitable,
08:16but a big one that stands out to me is just constantly evolving.
08:20Demi's got great vision.
08:21She thinks outside the box and within today's technology,
08:25she has taken the company into a different zone.
08:28I know work, I know production and maximize the use of time and fabric.
08:35While we're cutting these petals that he cut, we'll press the velvet at the same time.
08:40And Adam's repeating this now.
08:41The technology, the knowledge.
08:43Instagram, like what is that?
08:45How many followers do you think you have?
08:46I don't know, 800.
08:48No, more than that.
08:49Oh, 9,000.
08:51Dad, go look.
08:53There's 182,000 followers on Instagram today.
08:58We are thinking about more and more about using influencers.
09:03I'm learning.
09:04I'm still learning.
09:05We started selling flowers on Etsy 10, 12 years ago.
09:08And it was, it was like a novelty.
09:10Once a month, we would sell a flower.
09:12And now Etsy is, I don't want to say the exact number,
09:16because I don't know, like 10% of our business.
09:18And people finding us and just buying a flower.
09:21It almost pays rent.
09:22Yeah, and that's unbelievable.
09:28Let's see, money lessons I've learned from my daughter.
09:31Not a lot.
09:32Sometimes spending more money on different situations do help you save money.
09:39When you do make those investments and do the right research, and that was a big lesson for us.
09:44If we didn't have these tech advancements that we are putting, you know, our money to,
09:49and I don't think that we would be where we are.
09:51I think the main value that has just kind of been passed down generation to generation is
09:58live within your means.
10:00Save for a rainy day, because there is going to be a rainy day.
10:04If you have a small business, whether it's a new business or it's been around a long time,
10:08the most important thing is dedication, working hard.
10:11We've been here 109 years.
10:12You guys can all follow me.
10:14I hear him when he's giving tours, and I hear him thinks he's,
10:17it's at times a little mini me, but more than that, he is him.
10:21So we have 1,399 cuts to go.
10:23I teach my kids, don't underestimate any customer at any size,
10:31whether they buy one box or a million boxes.
10:34You treat everybody the same.
10:36You know, I was brainwashed years ago from 10 years old, quality, service, and never short anybody.
10:48Those are the words, and I embedded that in my kids.
10:51My dad was very, very particular about how he wanted his customers to be served.
10:58I remember my dad had a sign in his restaurant, the customer is always right.
11:03Us understanding what the market desires is what keeps our business profitable.
11:12So what is it like working together as a family?
11:16It's chaotic.
11:20I think that in a lot of family businesses, there are disagreements.
11:24Sometimes one family member pushes for something, whereas the other pushes for something else.
11:30Trust is a big part of it, but then also just knowing that there's going to be good days,
11:35and there's going to be bad days, and that's kind of the risk that you take in getting into a family business.
11:42My relationship with my dad had lots of components.
11:46We had a great father-daughter relationship, but he was also a perfectionist,
11:53and sometimes it's really challenging working with someone who is a perfectionist.
11:57It's on the table.
11:59They're just playing with you here.
12:01The new generation is all, I'm tickled by it.
12:06My dad was, sometimes he took some convincing, it took him some convincing.
12:13When you're trying to tell your dad something new about being in business,
12:18you know, he does have the upper hand, and so that can be a challenge,
12:23trying to get someone who has been doing something for a while to do something different.
12:27I have the office right next to my dad's office, so he just knocks on the wall and tries to get my
12:33attention, and I'm like, well, there is a phone, and he's like, well, it's just quicker and easier.
12:37It's quicker and easier.
12:38It was a period of time where we'd go on calls together, you know, we'd set up meetings with
12:45the folks who helped him with his infrastructure, distributors, and just so that they can know who I am.
12:51I can't think of any situation, you can tell me if I'm wrong, I can't think of any situation where
12:54one of us had a thought that the other one straight up disagreed with.
12:58You know, I love you, Pa.
13:01I'm just so happy to work with you.
13:03Aww, look at that.
13:05Look, I feel that muscle too, all these guys.
13:08Make sure to include that in the video.
13:10We all had to adjust in a way, and like, you had to adjust with seeing us as co-workers.
13:17I think in the beginning, we had a little bit more of like, uh, like kind of like,
13:22where, where are you going?
13:24Where am I going?
13:24Like kind of stepping on each other's toes.
13:28It's part of being like family, and the cool thing about it is that you can get into a fight
13:32and then make up five minutes later, so.
13:34My dad has become, he's always been my dad, but he really is one of my best friends.
13:39I talk to him every day.
13:40We talk on the phone, not just about dad's son, not just about business, but just life in general.
13:45I have my sister in the business.
13:47I have my niece in the business.
13:48It's a real family business.
13:50And then our, even some of our employees, their families are in the business.
13:53Yeah, yeah, we make them family.
13:54It's literally part of our DNA.
14:00He's not retiring.
14:02I don't know about that.
14:03We'll see.
14:04One day at a time.
14:05I'm not going to stay around forever, but I'm going to go as far as I can go.
14:09For me, that's fulfillment.
14:10He says he's retired and that he doesn't come in regular anymore, but my dad used to live and
14:17breathe his business every day.
14:18But I come very rarely.
14:20Let's be clear.
14:20I really am retired.
14:22I'm there by email.
14:23I'm there by phone.
14:24I'm there by passion.
14:26Good morning, gentlemen.
14:28There's no good news.
14:30What are you checking sports?
14:32I have two daughters.
14:33My oldest is just turned 25.
14:36My youngest is 23.
14:38Maybe if at some point in time they decide that, hmm, you know,
14:44I eat mumbo sauce all the time.
14:46Maybe this is something that I want to do.
14:49If they don't, it will be perfectly fine.
14:52I look at Emma Schmalberg as an amazing feat that we're still here.
14:57We did whatever we had to do to survive.
15:01And my mother would sit there on the kitchen table and do the payroll.
15:06She would type in different things.
15:09My father worked it, I worked it, and Adam's working it.
15:15And that's the only way the legacy will go on.
15:17Inheriting the business means to me that I'm carrying on a family legacy that isn't just
15:23something that's part of me, but it's part of our culture and our family.
15:28And so I think it's something that is like a duty of mine and my brother's.
15:34Nothing would be more to me than to somehow pass it down to my kids,
15:38or my sister's kids, or all of them, any of them.
15:42This year marks our 75th year in the market as a brand.
15:45We've done a good job in preserving the history of the brand and just the culture of,
15:56you know, African American culinary.
15:58This is our very first Instagram picture.
16:02There are so many avenues of business that if Adam does what he does and keeps planting seeds
16:08and letting the world know that one thing or another keeps coming through and we're able to sustain.
16:15I'm the second generation, third generation, and my kids are the fourth generation.
16:20And hopefully the fifth generation will succeed just like we do right now.
16:26My daughter, Skylar, who, as you do with a kid, what do you want to do when you get older?
16:32And in the cutest, most precious way, she looks at me and says,
16:36I want to work at Imanis Schmalberg.
16:38I want to make flowers.
16:40Well, no, so I can work with you.
16:45Today, he turned 42.
16:46It's my birthday. Let's make that a part of the video.
16:49Great. I swear to God, if you guys make that a part of the video.
16:52Is this camera centered? Because I see it more over here.
16:56Take photography.
16:57Tell the photographer how to do this thing.
17:00Large and in charge.
17:02I'll see you next time.
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