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Thursday, May 23, 2024

Families Learn Sometimes It’s Better to Hire Outside Help

Family business people are generally so busy at the outset of their self-employed journey and so threatened by failure statistics that it’s easy for them to not bother thinking about a company that becomes too large to be handled by one or two founders. Owners of companies that do flourish, however, often find that they need some outside help in order to reach the next level of success, or that the operation is just too large to be micromanaged any further by the family members. Larry Cimmarusti and his brother Ralph are the perfect example of just such a situation. The two of them grew up working in an Italian deli in Hollywood under their mother, Ann, when a Burger King restaurant opened up next door to them. They were instant fans, and a year later decided to invest in their own franchise in Simi Valley. Over the years, the brothers have opened 58 Burger King restaurants, six Tony Roma’s restaurants and 14 Original Roadhouse Grill Restaurants. Their company, Cimm’s Inc. employs over 3,500 people. Although each of them started out working as district manager, the company is now much too large for them to continue running each restaurant themselves. “To be honest with you, we have really brought our management team up through the company,” said Larry Cimmarusti. “We have people that have been with us for 25 years, and we really try to promote from within.” Cimmarusti said that members of his management team have started as hourly employees and gradually reached senior management positions. The company’s vice president of operations, Wayne Burke, has been employed at Cimm’s for 18 years and district manager Marlene Hutulla has worked at the company for 25 years. “They’re not employees, they’re family,”said Cimmarusti. “I just lost my mother and father, and they stood by us through the whole process, it’s like they lost their parents too. My parents are buried at the Cathedral in downtown Los Angeles, and our employees flew in from other states for the ceremony, from our stores in Texas and Oregon.” Neil Sherman, who runs Industrial Metal Supply in Sun Valley, knows exactly what it’s like to be overwhelmed by a growing business. He has tried to promote from within as well, but said it’s hard to select the right people to promote, and putting a person in a management position just because he’s good at his current job may not be the right decision for the company or its employees. “You have to be ready, we don’t want to set people up to fail. A person may be good at a lot of different things but not necessarily ready to manage people,” Sherman said. “The majority of our people we’ve produced up through the ranks.” Sherman said he regularly sends employees to management seminars and encourages them to continue in their education, but recently he’s been forced to look outside the company for sophisticated managers. The business, which generates well over $100 million every year, was after all greatly changed from its beginnings as a scrap metal salvage operation in the 1940s. “We’re just now start to get to the point, where because of the growth of the business we have to look for more professional type people trained in areas like management and finance,” Sherman said. “For almost 60 years we survived on internal management. . .but there are people who have gone to school and can come up with some better ideas.” Eric Steinhauer is now the president of the company, although Sherman maintains the position of CEO. Some family business executives have ended up in leadership positions by taking less direct routes. Greg Feinberg never expected to leave his legal career as general counsel for two medical diagnostic companies. But the company that his wife’s father started, Marfred Industries, was beginning to think about succession and needed someone who could develop astrategic vision for the company. He joined the company in 2003 as a senior vice president, and was named president-elect of the company later that year. Mark Fenster, son of current president Marvin Fenster, was named CEO-elect.

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