Rick Harrison’s pawnshop business is being tested like never before. He founded the Las Vegas Gold and Silver Pawnshop together with his father, Richard, in 1988, after his dad lost $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 jewelry 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,” and part “American Chopper,” called “Pawn Stars.” Now, with the popularity of the show, Richard and Rick, along with Rick’s son and eventual successor, Corey, are experiencing some growing pains. “I’ve gone from 15 employees to 27,” says Rick Harrison. “I’m trying to get everybody to understand how everything flows here because this isn’t your average business.”

“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.”

Unlike at most retail shops, which receive the same merchandise on a regular basis in multiples of 50, when Rick Harrison gets 1,000 items in his pawnshop, every single one of them is different. He also has to consider carefully what he pays for merchandise because there’s no set price for much 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 6-year-old son, and he’s not going to be in it,” says Rick Harrison. “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 in Atlanta, those family operations that succeed to 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 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.

“I’m trying to get everybody to understand how everything flows here because this isn’t your average business.”

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.

The Harrisons formalized their communication long ago. For them, harmony at the shop and in the family means that ultimately, decisions come down to one man.

“It can be sort of hard, sometimes, to work all day with your family and then come over to the house for Christmas, but basically everyone understands that I run things now,” says Rick Harrison. “We’ll discuss everything, and we try to come to an agreement, but if there’s not an agreement, it’s going to go my way.”

That’s a good move because otherwise, Schwerzler says, family members start playing telephone. “Let’s say Dad is more concerned with the business side and Mom is the chief emotional officer, so she often is the peacemaker. And when the kids are having a problem with Dad, they go to her, and Dad tells her what to tell them. There’s a triangulation of communication that goes on that is very hurtful for family businesses.”

Plan for the future

One of the cornerstones of the ongoing drama in “Pawn Stars” is Corey’s, aka Big Hoss’s, desire to be made the third partner with his father and grandfather and then eventually succeed them all together.

“Me and my dad are partners 50-50 here, and we’re going to start slowly giving Corey pieces of it over the next few years,” says Rick Harrison. “We have trusts set up and paid all the money to the lawyers to make sure everything should be seamless.”

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