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Family-Owned Business: Backbone of the Economy

The family business is the world’s dominant form of business organization, no country more so than the United States. According to figures compiled by the Family Firm Institute, family firms comprise 80 percent to 90 percent of all businesses in North America. These companies account for 60 percent of total U.S. employment, 78 percent of all new jobs and 65 percent of wages paid. According to Gaebler Ventures, a Chicago-based business incubator, family businesses account for 50 percent of the gross domestic product. “It’s tempting to believe that the majority of family business GDP is attributable to thousands of small operations, but that simply isn’t the case,” the company states. “Here’s why: 35 percent of Fortune 500 companies are family companies. That means family-based operations are represented across the full spectrum of American companies, from small businesses to large corporations.”
In San Diego County, family-owned companies are a dominant force in the regional economy. Here are profiles of a few of them.

Ahern Insurance Brokerage & Callan Capital

Two companies turn sibling rivalry into business success

Plenty of people start businesses with friends or even take over businesses from parents, but to operate a successful business with your siblings takes a special set of skills. Two local firms have found just the right balance to turn past sibling rivalries into dynamic business prowess.
Ahern Insurance Brokerage, an insurance brokerage firm specializing in the needs of law firms, is owned and operated by W. Brian Ahern with help from his sister, Ellen, who also serves as partner in the firm, and brother, Kevin, who manages the firm’s Northern California business. Callan Capital, a boutique, independent wealth management firm headquartered in La Jolla, is owned and operated by three brothers, Trevor, Tim and Ryan Callan.
Although their service platforms are different, similar philosophies have helped these companies perform at the top of their respective fields. According to both firms, making a family business team successful means defining each person’s role by individual strengths and then respecting the autonomy that each person needs to best perform their duties.
“Who better to understand your strengths and weaknesses than your siblings?” asks Trevor Callan, CEO of Callan Capital. “The key is to avoid using this knowledge to compete with one another, but rather to figure out how it can best be applied to creating and running a successful business.”
Brian Ahern agrees that different strengths help companies grow stronger, faster. When Ahern Insurance was still a young company, Brian invited Ellen to join him based upon her marketing expertise developed from 13 years in the retail industry. “The fact Ellen didn’t have an insurance background wasn’t important. Her stellar business development, sales and people skills were what she brought to the table,” he said.
At Ahern, Brian runs the day to day operations as well as setting the strategic course for the firm. As executive vice president, Ellen is responsible for leading the company’s strategic marketing efforts. Kevin, a vice president, heads the firm’s San Francisco office.
Leveraging off of successful careers in the finance field, the Callan brothers left Merrill Lynch’s Private Banking and Investment Group together to start Callan Capital. Now Trevor serves as CEO, Tim as president and Ryan as COO.
“For us, it was important that we all have titles reflecting our equally important C-level management roles, but internally we divide responsibilities according to our different strengths and interests,” said Ryan Callan, who handles human resources, compliance, technology and client events for the firm.
Tim takes responsibility for clients’ overall financial planning and oversees some additional support functions. Trevor handles portfolio strategy and design.
“Growing up together really helped all of us know how best to communicate … and how not to communicate,” says Tim Callan. “After four years in business, we tripled our assets under management, so I think that’s a good sign that we’re communicating well.”
Shared values between siblings can also help direct and nurture a good working relationship within sibling firms.
“We all grew up with the same Midwest values of working hard and paying your dues to get ahead but also of bringing the highest level of honesty and integrity to everything you do,” said Brian Ahern. “Sharing the same values, we were all on the same page about positioning the firm to become one of the largest independent insurance companies catering to the needs of law firms in the southwest region.”
Ryan Callan says that the Callans’ shared values transcend the workplace to include how they spend their free time as well. “We all feel a sense of belonging, we share the same vision for our company and we give one another the freedom to explore and take chances for the overall success of our company,” he added. “We are also very close outside of work, spending weekends and holidays together with our families. We also share most extracurricular activities, such as surfing and skiing together.”
Brian echoes the sentiment that working together doesn’t mean siblings won’t want to spend time together outside of work. “We are a close family and enjoy each others’ company at work and after work,” he states.
Shared values also drive both firms’ commitments to public service. Brian Ahern recently finished a two year term serving on the board for the San Diego Volunteer Lawyers Program.  Ellen is a former director of the San Diego County Bar Foundation, which grants money to organizations that assist in the delivery of legal services and provide education regarding the justice system. The Aherns recently established a scholarship to provide finance assistance to University of San Diego undergraduate students in honor of their late father, William, and gave gifts to three needy families over the holidays.
The Callans say they were taught responsibility early in life, and that sense of responsibility fuels a great desire for them to give back to the community. Accordingly, Trevor has co-founded two nonprofit groups, Equinox Center and PEERS; Tim is a member of the Kiwanis Club of San Diego and the Boys and Girls Club of San Dieguito; and Ryan will serve as Kiwanis Club of San Diego president in 2012. Ryan also helped found the Kiwanis Young Professionals Group, which contributed significantly to the group’s 20 percent membership growth last year.
Brian Ahern says that while running a business with family means, for him, having the peace of mind that others at the helm share a family pride in making the business succeed, he instills much of the same trust in his employees.
“You don’t have to be blood to be considered part of the Ahern family,” said Brian Ahern. “We take special interest in of our employees similar to how we would with family.”

50 years and 30,000 homes later

McMillin is still a family organization

It started with one man’s vision to help families live their dreams. Fifty years later, The Corky McMillin Cos. has built nearly 30,000 residences, and has grown into a fully integrated real estate investment, land development, and home-building company.  Founded in November 1960 by Macey “Corky” McMillin Jr., The Corky McMillin Cos. has become one of California’s premiere builders and earns an annual ranking by Professional Builder Magazine as one of the nation’s “Housing Giants.” Yet, after years of increasing success, the company retains its founding values and still operates as a family-owned business.
In 1960, working with a loan backed by the equity in his own residence, Corky McMillin began building his first home. He took the money he made from the first home and built two more. Piece by piece, nail by nail, customer by customer, he and his wife, Vonnie, built their small company into the largest locally-owned, full-service real estate firm in San Diego.
Corky McMillin gradually expanded his organization into small tract development, and then into multi-neighborhood communities. In 1972 Corky started McMillin Realty to offer his home buyers assistance in selling their previous residences. In 1989 a mortgage division was added, and later a separate commercial company was established. Now, 50 years later, The Corky McMillin Cos. has expanded to five core companies: McMillin Commercial, McMillin Land Development, McMillin Homes, McMillin Realty and McMillin Mortgage. The goal of the organization remains to provide customers from all walks of life with the complete range of real estate services under one name.
Since its inception, the family of companies has not only built nearly 30,000 residences, it has demonstrated its strength in commercial and infrastructure development. McMillin has created 16 mixed-use master-planned communities, more than 20 community parks, thousands of miles of new roads, schools, shopping centers, commercial offices, industrial parks, college dormitories and 2,000 military residences on seven bases.
In recent years, the company has expanded its operations outside of the San Diego area, where it was founded. The Corky McMillin Cos. now operates in the California regional markets of San Diego, Lake Elsinore, Imperial Valley, Bakersfield, Fresno, Hanford, and Visalia, as well as San Antonio, Texas, and Branson, Mo.  he company plans to build approximately 600 homes this year.
The company is currently led by sons of Corky and Vonnie McMillin — Scott McMillin, chairman of the board, and Mark McMillin, president and chief executive officer.
In San Diego, McMillin is widely known as the developer of Liberty Station, a mixed-use master-planned community that was voted Base Redevelopment Community of the Year by the Association of Defense Communities.
“Throughout our history we’ve built thousands of homes and several commercial properties which will serve families and communities for generations to come,” says Mark McMillin. “We continue that tradition today and are already planning new communities to take us into the future.”

1 Comments on “Family-Owned Business: Backbone of the Economy

  • At Family Enterprise USA (FEUSA), we couldn’t agree more with the title of this column. Our motto: Family enterprises are the backbone of the communities they serve, and together they are the lifeblood of the American economy.

    While family businesses are the dominant force in the economy, very little attention is paid to that fact. We support SD Metro’s efforts to highlight the impressive statistics that show the family business sector’s impact on the economy, and we congratulate these two fine businesses you chose to profile. However, family businesses can suffer from unintended consequences when laws do not account for the family ownership aspect. We hope that, moving forward, family businesses are not disadvantaged just becaused the owners (and possibly some of the employees) are related.

    For more information on FEUSA’s efforts to shine a light on the “lifeblood of the American economy,” please visit our website at http://www.familyenterpriseusa.org.

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