Every small business owner faces the question of what comes next. Transitioning a family business to the next generation is a milestone many entrepreneurs dream about, but it comes with its own challenges. Whether you plan to pass the company to a co-founder, a trusted partner, or family members, planning is key.
Below, we explore insights from three successful family-owned surf shops to illustrate how transitioning leadership can be done effectively and the lessons learned along the way.
Tom Brown, 17th Street Surf Shop
- Locations: Four stores in Virginia, two in North Carolina
- Leadership Transition: Tom Brown, founder; Tyler Brown, president
Generational Growth in Experience
“Tyler was 5 years old when I came to 17th Street in 1992. He grew up skating, surfing, and wearing all the lifestyle clothing. Working in the stores through high school, he met many of the traveling icons in the sport. He attended a couple Surf Summits and met the owners and executives driving the trends in the action sports business.
“In college he spent a summer in California interning for Billabong. That gave him a better understanding of the wholesale side of the business.
“Upon graduating from college in 2009, he joined me full time at 17th Street. In 2011 he was promoted to men’s buyer. Due to his success, he was promoted to vice president in 2016. His job was managing the day-to-day operations of the business.
“I began living in Florida for six months a year and would come back to Virginia in May to help with long-term financial planning and strategic growth plans.
“The pandemic changed everything. His managing of the business through those two years really proved to me that I was not involved and had very little to offer in the way of how retail runs. Since 2021, I have limited time in the office now, offering to help out with special projects. He has, for the most part, been on his own since 2022.”
Rethinking Inventory Strategy
“In corporate retail, we studied a lot of data to decide what direction to take in our inventory decisions. We relied on what sold last year, and what to repeat. New vendors had to be tested to get some data before we jumped in. I now call that Rear View Merchandising.
“Tyler is more of a trend guy and goes with his gut about what the next big thing will be. He wants to lead the community to the next great item. For example, he went big on Yeti when I questioned the price points, and he was on the front side of elastic shorts and swim when I would have spent time testing the waters.
“His success with new items is the reason I have not looked at a line with him in six years. I no longer have the same understanding of the customer.”
Navigating Family Dynamics
“The biggest challenge is getting them to understand that as a mentor, you are the boss and no longer a parent.
“The day Tyler started in the central office I was ‘Tom’ and no longer Dad. The expectations I put on my staff were no different for him as my son. He could bring his own methods to the table as long as they got the desired results. His success was his success and not an imitation of what I told him to do. My challenge was to be patient and not expect him to be immediately successful.
“The upside is he will continue a company that has been around since 1970. Many of our staff have been here for 15 to 30 years and will continue to work in the business they love. He has endless opportunities to write the next chapter for a company with a long history in the surf and skate culture.”
Bringing the Kids into the Business
“My accountant warned me early on about the amount of failure he had seen in companies transferring management to children. I believe it has worked for us because I started my kids early, while in high school. They worked in the stores and not directly with me. Their level of interest was documented by trusted managers who knew that they were not to get special treatment. The choices they made after college were theirs to follow in careers they would enjoy.
“If they choose to work for you, they must show a passion for the business and a desire to lead people. That is the only way it will work. For me the good news is whatever they choose, they know as a parent you will love and support their decisions. The rest is up to them.”
Josh Hansen, Hansen Surfboards
- Location: Encinitas, California
- Leadership Transition: Don Hansen, founder; Josh Hansen, CEO
Gaining Business Acumen
“I started working at Hansen Surfboards in 2001. I went to business school and graduated from the University of Vermont. When I graduated, I came straight out here. It was right during the dot-com bust.
“I always had an interest in business in general — how they work and function, management, and leadership.”
“I think it was always in the plan that eventually I would end up in the family business. My parents, they always wanted all the kids to eventually work in the business.
“My dad’s 86 years old. He spends half the year in Montana. The other half of the year he’ll come in for an hour or two in the morning and read his paper and do all of that. He was way more active 10 years ago (in the business).”
Handling Family Dynamics Effectively
“When you work in a real family business, and I would say we’re the epitome of that, there are a lot of dynamics that are part of that whole relationship. All my siblings have different skill sets, so it was always very clear as to where everybody fit in the business. That can actually be uncomfortable at times because that’s not always what everybody feels are their capabilities, but my dad was always very transparent and candid about who was going to do what in the business. Admittedly, it’s not always easy and, at times, it can be messy.
“Everybody always asks, ‘How do you manage the family business?’ I always say it’s just a lot of patience. You’ve got to think and do what’s good for the family and not always necessarily what’s good for you.”
Staying Grounded in Transparency
“My dad has always taught us to be conservative. Some guys might read that and say, ‘You’re not finding your full potential,’ but we’ve been blessed with a sustainable, great family business in Encinitas. There’s a good thing going here, so let’s not reinvent the wheel.
“But, the biggest thing my father taught me, my sister, and my brother is to treat people right and do the right thing.
“And then I think your siblings always keep you honest. You learn to work with them and communicate with them. That’s something that’s not only a lesson from my siblings, but other employees in the business. I’ve had to personally grow a lot and learn to be a better communicator. I’m not a real big fan of meetings but inevitably they’re an important aspect of a business, especially as it’s growing and there are new employees and new departments.
Mark Richards, Val Surf
- Locations: Four stores across California
- Leadership Transition: Bill, Mark, Kurt, and Eric Richards, founders; Mark’s sons Brandon Richards (president) and Blake Richards (VP); Kurt’s daughter Denise Richards (secretary/treasurer)
Cultivating Fresh Perspectives
“Brandon, Blake and Denise, who’s my brother Kurt’s daughter, began working at Val Surf in their teens, with limited time during their college years. For some time now, they have been the president, vice president, and secretary/treasurer, respectively.
“In addition to the responsibilities that go along with those roles, they are also all very active in other areas, such as buying, scheduling, marketing, sales and HR.
“There’s a lot that they have contributed from their youthful vantage point about how they see and deal with the goings on of our business. This includes how to relate, respond, and adjust to the current climate of the surf/skate/snow industry and, most importantly, to the constantly transitioning and changing character and interests of the customer base and employees.”
Managing Business Dynamics
“It could go without saying that being a family business from the very inception back in 1962, we have been constantly hearing about how great the upsides must be. Well, yes, in large part that is true.
“However, we would be naive to say that always means a smooth, profitable, and successful running business. We do have differences of opinions that surface on occasion and need to be addressed as in any business, whether led by family or a mix of employees from within.”
Bringing the Kids into the Business
“I believe, as in my case with my boys, that it is essential that the drive is more than just their interests and being active participants in the surf/skate/snow lifestyle, although that is most important as well. This was the driving force that brought out the concept of opening the first surf/skate inland shop back in the day with our family having little or no business background at the time.
“But of course, this is still a retail business, first and foremost. That will continue to present constant challenges and outside elements to tackle and resolve.”
Common Threads in Family Business Transfers
Reflecting on these stories, several best practices emerge for family-owned businesses looking to transfer leadership successfully:
- Start early. Introduce younger generations to the business through hands-on involvement.
- Provide space to grow. Allow them to develop their unique leadership style rather than replicate yours.
- Define roles clearly. Transparency about responsibilities is key to avoiding confusion and tension.
- Foster a shared passion. The incoming leader must exhibit both a drive for success and a love for the business.
- Be patient. Transitions take time — allow the process to unfold without rush.
This article is adapted from one originally published in 2023 in our sister publication, Shop Eat Surf Outdoor.
