Lunch With: Hudsons Canadian Tap House’s John Radostits on challenging the family business
How tough is it to leave your parents’ business and launch a competitor?
Lunch with … is a column for Alberta Venture. Every month, we ask a young executive to pick a person with whom he or she would like to talk business. The senior executive, if willing to act as mentor for an hour or so, gets to pick the place to eat. If you would like to participate, email Michael
by Michael Ganley
YOUNG EXEC: Ryan Neumann
HISTORY: For eight years Neumann worked in his parents’ business, Apex Upholstery & Custom Commercial Booths. After disagreeing with them about the future of the business, he went his own way, founding the Onsite Group almost four years ago
NUMBER OF EMPLOYEES: 20
LUNCH: Steak sandwich, medium, HP Sauce, no mushrooms. Fries on the side, no gravy. Water
SENIOR EXEC: John Radostits
HISTORY: Radostits has been in business pretty much since he was born, as his family’s company owned a number of grocery stores.
For 22 years he has been the president of Radco Group. Among other business interests, Radco is part owner of the Hudsons Canadian Tap House chain of restaurants
LUNCH: Grilled chicken, seasonal vegetables and brown rice. Diet coke
Photograph Jason Everitt
Ryan Neumann is in the midst of a long-simmering family conflict. For eight years he worked for his parents in their business, Apex Upholstery. But he felt the business needed a solid plan, and needed to adjust more quickly in an evolving market. He approached his parents with business plans several times, but they were happy with things as they were. Eventually, Neumann parted ways with Apex and founded the Onsite Group, which is now a direct competitor. Needless to say, the move has caused some friction.
As a result, he asks for John Radostits, a well-known entrepreneur and mentor and a man who grew up in a family business, as his lunch companion. Until 2011, Radostits’s family owned a chain of grocery stores in the Edmonton area under the Sobeys banner. Radostits was active in the business throughout his life, rising to president of the Radco Group by the time it sold the Sobeys stores. Radco continues to be active in a number of businesses, including the Hudsons Canadian Tap House chain of restaurants.
The two men meet, naturally, at the Hudsons on 104th Avenue in Edmonton. After placing his order, Neumann tells of following one of the business plans he’d put together, this one involving a mobile unit. He bought a truck from a linen company and installed a generator, table, heaters and a sewing machine. “I ran around from restaurant to restaurant doing upholstery,” he says. “I provided such a high level of customer service that customers said, ‘Can you build my booths?’ That was in my five-year plan, but not my one-year plan.” But he jumped on that train and started building for restaurateurs. Now three-and-a-half years into it, Neumann has bought a millwork business, moved the equipment into a bigger space and grown the business to 20 full-time staff. He expects to do $2.5 million in sales this year. Onsite is now bigger than Apex, and Neumann has made overtures to his parents, offering to buy them out several times. “It’s always been, ‘Nope, not interested,’ ” he says, “and no counter-offer.”
Radostits concedes that he has been in his share of heated family discussions. “Dealing with generational change is one of the most difficult things, and it’s very common in a family business,” he says. “There were times when I said to my dad, ‘One of us is leaving.’ I’m glad we got past that, but it took me a long time to say that even to myself, and then to my dad.”
Neumann feels torn in two by his situation. “I’ve tried to be the good son, and I’ve tried to be the good business owner,” he says. “I don’t know anyone who has been through this kind of Jerry Springer moment.” Radostits commiserates. “I don’t see this as a Jerry Springer moment,” he says. “The family business is both the strongest foundation and the weakest depending on the family and the time.” To help cope with the personal and professional challenges that come with the territory, the Radostits family got involved with the Canadian Association of Family Enterprise, a not-for-profit network that promotes well-being and success for family businesses. The biggest challenges came when they decided to sell the Sobeys stores. Based on the terms of the deal, Radostits and his brother remained active in Radco Group, but their two sisters would not. “It was a big, emotional move for us,” Radostits says. “It was the right thing to do, but there were many times when my father and I did not see eye to eye on the future.”
He says the founders of many family businesses struggle with the notion of leaving, because their work has become such a big part of their identity. “That’s who they are in the community and with their friends,” he says. “After, then what?” He suggests that Neumann sit down with his parents and talk about what their role would be if he did buy them out. “What do the next five years look like for your parents if you did do the deal? Would they have a role to play?” Radostits is still a partner with his father in some of his ventures.
Neumann pulls out a pad of paper and starts taking notes. The two men discuss the need for mentorship, the importance of long-term planning and the benefits of joining industry associations as a way to network and to learn about what’s happening in your industry. Then Neumann brings up the other big burr in his saddle: He’s working too hard. He and his wife have two young children, and he wants more time with them.
“I keep hiring more people because I want more time,” he says, “but as I hire more people I keep getting busier because I have to keep them busy and productive. I try to put barriers up to slow me down, like signing a lease that sets a physical limit, but then I build a mezzanine or I go rent a bay for storage. It never ends.”
Radostits, also married with two children (his are quite a bit older than Neumann’s), concedes that in one sense he’s always working. “Whether it’s phone calls on the weekends or in the evening, I weave work in with the ebb and flow of things,” he says. But if sometimes he works until midnight, there are others when he leaves the office early on a Friday and heads with the family to the lake. “Managing time is probably the biggest challenge any entrepreneur faces,” he says. “If you had a spare 1,000 hours, you could turn it into something profitable, but you have to ask yourself, ‘What’s the best use of your time?’ ”
Radostits has several pieces of advice. First, find a good second-in-command, a “mini-me” that you know well and can trust with business decisions whether you’re around or not. Second, he suggests that Neumann ensure he’s taking the time to improve his entrepreneurial skills. “Many entrepreneurs fail to invest in the one person who has the most influence on the bottom line, the top line, and everything in between,” he says. “They don’t invest in training themselves.” For his continuing education, Radostits reads the weekly email of growth-guru Verne Harnish, listens to audiobooks, does courses through the Institute of Corporate Directors and the Carnegie Business Group, and he talks. “I learn best from talking to people,” he says.
Radostits has also carved out a unique space for himself every Monday night. “I call it ‘Going into the cave,’ ” he says. “I work late every Monday and that’s when I put the week together. The phone doesn’t ring, there are few emails. That’s been very effective and my wife and I have worked it into our lifestyle.”