Family matters
By Aaron Broverman • Bankrate.com

Rick Harrison's business is being tested like never before. He founded Las Vegas's Gold & Silver Pawn Shop together with his father, Richard, in 1988, after his dad lost US$1 million in real estate and was forced to find a new hustle to feed his family.

Known for considering anything from routine watches and jewelery to rare American Civil War weaponry and Native American totems, the father and son drew the attention of The History Channel for a new reality show that's part Antiques Roadshow, part American Chopper, called Pawn Stars. Now, with the popularity of the show, the two, along with Rick's son and eventual successor, Corey, are experiencing some growing pains. "I've gone from 15 employees to 27," says Rick. "I'm trying to get everybody to understand how everything flows here because this isn't your average business."

Unlike at most retail shops, which receive the same merchandise on a regular basis in multiples of 50, when Rick gets 1,000 items in his pawn shop, every single one of them is different. He also has to consider seriously what he pays for merchandise because there's no set price for a lot of what he buys.

Combine that with the potential stresses of doing business before the cameras, and things are the busiest they've been in the store's history. "We did make some ground rules before we started. We explained to the film company that my wife's not going to be in it, my mother's not going to be in it, my son's wife's not going to be in it (and) I have a six-year-old son, and he's not going to be in it," explains Rick. "We've seen reality shows, we know what they do to families, and we made sure from the get-go that that's not going to happen to us."

The Harrisons have managed to work together for 22 years, and their business is still standing. But with only 30 percent of family businesses making it to the second generation and that percentage dwindling for each successive generation, how can you replicate their brand of success without tearing each other apart?

Formalize communication
According to the Family Business Institute, of Atlanta, Ga., those family operations that succeed past the second generation and beyond have been able to streamline their communication. "They learn to be more planful. Their management style changes to where they're running the business using information and management systems, rather than just opening up the door and hollering down the hall to get things done," says the institute's founder, Don Schwerzler, who has advised families in business since 1967.

On the family side, being planful for Schwerzler means holding regular business meetings or retreats -- it's the only way to personalize the management of the business (what keeps customers coming back) effectively. "They're very, very critical because if you're going to create a mission statement for the business, first you must create a mission statement for the family. It is the planning for the family that should be driving the planning for the business," Schwerzler says.

He recommends that family planning include an understanding of what each member wants and what their competencies and abilities are. It should also include the creation of buy-sell agreements, so no one is tied to the family business for the rest of their lives, unless they want to be.