It’s probably every entrepreneur’s dream to have the business they raised from infancy live for a century or more. But how, exactly, does a business owner increase the odds that their business will last that long?

It’s tough to do, said Randy Coe, director of the Family Business Center at the College of Business at the University of Louisville. As most fledgling companies are family businesses, looking at their survival rates gives a snapshot of just how difficult it is. One in three businesses survive into the second generation, and one in 10 into the third generation.

“To succeed over time, there has to be a market-driven need that a business fulfills,” Coe said. “Needs change over time, technology and resource depletion and the like. Successful companies over time must be innovative and reinvent themselves across the decades.”

For this month, The Lane Report looked into the stories of four Kentucky businesses that have beaten the odds and survived for more than a century. Their histories illustrate some of the best business practices that span both time and industry. They offer lessons in longevity – and sheer determination – to any business with the will to survive.


Kentucky's Supercentenarian Companies
What do the state’s oldest businesses have in common? Not a lot, other than their age. Here’s a sampling of businesses that have been operating for more than 100 years.

Bank of Maysville, Maysville	More than 165 years old, claims to be Kentucky's oldest bank
Brown-Forman Corporation, Louisville	Founded in 1870, one of America's largest alcohol producers
Buffalo Trace Distillery, Frankfort	A bourbon producer that traces its roots to 1857
Dahl & Groezinger, Inc., Owensboro	Recycles and processes scrap metals
Hellman Lumer Company, Inc., Covington	Sells lumber and other building supplies
Hillenmeyer Nurseries, Inc., Lexington	Family-owned since 1841, provides landscape and design services
The Courier-Journal, Louisville	Kentucky's largest daily newspaper
Wissman Brothers, Inc., Florence	Founded in 1894, builds custom stairs and rails
Wyatt, Tarrant & Combs, LLP, Louisville	A law firm dating its origins to William Christian Bullitt in 1812

Secrets of Success

As the editor of Kentucky Humanities magazine, Charles Thompson, assistant director of the Kentucky Humanities Council, thought there were some good stories behind many of the state’s oldest businesses.

He was right. The results of his interviews with business owners were published in “Going on 200: Century-Old Businesses in Kentucky,” published by Harmony House Publishers in 2003.

Through his work, Thompson discovered that many of the state’s oldest businesses had some similarities. Here’s a look at what they had in common:

• Great customer service. Elmore Tonini, who operated Tonini Church Supply in Louisville, told Thompson, “Bend over backwards and bite your tongue 20 times to satisfy a customer,” and, if the customer wants the impossible, do that, too.

• Ideas transform companies. Frank Simon, who was operating Publishers Press Inc. in Shepherdsville at the time, had an idea for printing short-run magazines on a web press, which many told him would waste too much paper. Simon figured out a way to do it, and before long, it was fueling the company’s growth.

• Crisis breeds innovation. At Bagdad Roller Mills in Bagdad, corn meal for the federal food commodity program was their staple. When that program disappeared in the 1970s, the company was forced to diversify to survive. Today, they make feed for virtually every kind of animal.

“Going on 200: Century-Old Businesses in Kentucky,” a 100-page book, is available through the Humanities Council for $20.95. To order, call (859) 257-5932 or go to www.kyhumanities.org.

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Luckett & Farley Architects, Engineers
and Construction Managers Inc.
Louisville

For the management of Louisville-based Luckett & Farley Architects, Engineers and Construction Managers Inc., keeping the business going strong has involved a series of calculated ownership moves.

Founded in 1853, Luckett & Farley was first an architecture firm. The firm is well known enough to have designed the twin spires for Churchill Downs in 1895 – and to do the massive remodeling at the fabled racetrack from 2002 to 2004. But all the business did was architecture. Jean D. Farley and T.D. Luckett II purchased the company in 1962, changing the name from D.X. Murphy and Brother to reflect the new ownership.

In the 1970s, to help coordinate large projects and meet client needs, the firm added engineering services. “We could do it faster and better than hiring a subgroup of engineers,” said Ed Jerdonek, president and CEO of the organization.

In 2002, when Ron Kendall, a partner in the company, retired, Luckett & Farley decided to look far into the future and create a way to bring up leaders in the company. When Kendall left, the employees together bought out his stock in the privately held company through an employee stock ownership plan. That organization now owns 53 percent of the company. The company has about 100 employees and had about $17.5 million in revenue in 2005.

When Dennis DeWitt, the successive president and CEO after Kendall, retired in early 2005, a group of 10 executives with the company bought out his stock. That group includes Jerdonek, who took the president and CEO title; Rob Diamond, executive vice president and chief operating officer; Gail Miller, vice president of finance; Belinda Gates, vice president of business development; and six other associates who hold smaller percentages of ownership.

As Jerdonek sees it, thinking diligently about who will lead the company into the future is what helps the company continue to succeed and ensures it will be around another 150 years. Those six minor partners will one day succeed the four top partners, and that’s how it should be, he said.

“My partners and I are seventh-generation owners of the company,” Jerdonek said. “It is extremely unusual for any arch firm to successfully transition once, let alone seven times. We have something that works here. I think the answer is in the culture of accountability and leadership development. We don’t want any hired guns. We don’t want outside organizations to merge with. What we want to do is give other people the same opportunity we got. That same attitude has been shared for decades.”

This generation of leadership has made at least one significant change: adding the design/build component to the company. This enables the firm to take a project from drawings to engineering to completion, Jerdonek said.

And the management emphasizes marketing by reputation. About 90 percent of the company’s customers are repeat clients, he said. “The best thing (the employees) can do is do their best work,” Jerdonek said. “It’s very simple.”

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Stewart Iron Works
Covington

Iron fences around homes and decorative cresting for the ridge of a roof were all the rage when two brothers started Covington-based Stewart Iron Works in 1886.

The company’s products proved popular with the Victorians who loved the look. Fortunately for the brothers, other organizations that needed iron products came along and bolstered the company’s bottom line. The company began making bars for jail cells, supplying most of the materials for all of the country’s federal prisons. And by World War I, the company also was making trucks. Stewart also had a strong line of wrought-iron outdoor furniture. All of this led to prosperity for the company, which had some 3,000 employees by about 1920. “It was the largest employer in Covington,” said Tom Smith, general manager of Stewart.

Things changed. The company’s most successful business units were sold off. By the 1970s, it was a much smaller company. It was sold out of the Stewart family a few decades ago, Smith said, and by about 2000, was a company that mostly did local and regional ornamental ironwork.

In 2004, Stewart’s owners contemplated closing. In the aftermath of the terrorist attacks of Sept. 11, 2001, many of the company’s strongest clients and potential customers had simply put a freeze on any pricey projects. The company wasn’t doing well and didn’t have much business. The owners saw little point in carrying on.

But a new group of owners, called Covington Iron Works LLC, bought the company out, seeing rich opportunities. Stewart’s name is on virtually every significant ironworks project from 1886 on, Smith said, and that reputation had to be worth something, especially among the historic restoration crowd.

“They could start to see that the interest in wrought iron products was coming back to life in the U.S.,” Smith said. “They thought it might be a very opportune time to take the interest in these products and grow the company.”

Today, Stewart has about 20 employees, up from 10 a year ago, and is aggressively seeking opportunities for growth. Smith said the company plans to double its sales every year for the foreseeable future. They’ve added sales staff, Smith as a new manager, and are buying more advertising and investing in new equipment. As they see it, ornamental iron is a great product for a nation becoming obsessed with the look of its homes. Smith declined to release revenue or sales figures.

High-end hotels and casinos also are turning to the product for a rich, nostalgic look. Smith thinks the business has a strong future with nowhere to go but up.

“There is something unique about the name of the company,” Smith said. “When you first hear about it, it sounds familiar. It was so predominant in so many places, and it’s done so many national historic buildings.”

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Papania's Inc.
Lexington

It might seem contradictory for a business to shrink to survive. But that’s exactly what the new generation of owners of Papania’s Inc. did to ensure the business would live into another generation.

Papania’s, a fruit and vegetable distributor in Lexington, started in 1896, when Guiseppe Papania regularly took a horse-drawn wagon to Cincinnati and brought back bananas, selling them at the corner of Vine and Broadway in Lexington, according to Jeff Papania, vice president of the company. For 60-some years, that’s exactly where the business was located, until urban renewal hit Lexington, moving the business out to Winchester Road.

For many years, grocery stores were the bread and butter of the business. Until the early 1990s, the company’s distribution area stretched into West Virginia and almost to the Tennessee border, Jeff Papania said.

“We were getting too spread out,” Jeff Papania said. “It was difficult to maintain as large of a fleet of trucks as we had.”

With the preponderance of large chain grocery stores such as Wal-Mart and Meijer, that market was beginning to fade, and Jeff and his brother, Bill, who is president and CEO, made a strategic decision: Stop selling to grocery stores. Instead, the company hit restaurants, hotels, catering businesses and other sectors that sell prepared food. The competition is still fierce, but sales have more than doubled in the past decade, Jeff Papania said. He declined to release the company’s revenues. The company has about 30 employees.

“We compete against these larger broad-liners that sell everything a restaurant would use, from napkins to glassware to fruits and vegetables,” Jeff Papania said. “We’ve done what we had to do to secure contracts with some of the chains and to build relationships with those who set up these kind of contracts. There is a niche for a small company like us that specializes in produce. We know what we’re doing and we buy everything direct from the shipping point. We can offer good quality and good service for a fair price.”

Jeff Papania said the main selling point for his company is superb service. If necessary, a delivery truck will go to the same business two or three times a day, whenever it is convenient for the business. And on many occasions, even the company’s top management has put a vegetable or two in their trunk on a Sunday morning and driven it to a desperate restaurateur. Jeff Papania said any one of his staff will be asked to do that whenever it’s necessary.

The business also specializes in getting hard-to-find items. If a customer needs something flown in from the West Coast just in time for a New Year’s Eve party, Papania’s will make it happen, he said.

“The thing about the Lexington area is that there are a large amount of restaurants, and the population supports them,” Jeff Papania said. “With as many as they are, they can do well and flourish, and they have. Every year, there are a number of new ones opening.”

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Weisenberger Mill
Midway

Each successive generation of Weisenbergers has made its mark on the Weisenberger Mill with some daring moves – each of which paid off.

The mill started in 1862, moving to Midway in 1865. The second and third generation, working together, tore down that mill and built a new one in Midway, according to Phil Weisenberger, vice president of the mill. “My great-grandfather and my grandfather took a heck of a risk from 1911 to 1913 by tearing down the old mill and building the main building that is here,” Phil said. “That was a big undertaking. Back in those days, that was a big risk.”

Phil’s father expanded the business’ delivery route to a radius of 50 to 75 miles from the mill. By then, the company had a fleet of trucks that took the product to grocery stores and other places that sold it.

But it was Phil who decided to reduce that delivery area and change the entire structure of the business. He took over after his father’s death in the 1950s.

As Phil saw it, delivering directly to grocery stores was costing the company a fortune. With some 35 to 40 employees, it took quite a workforce to get the job done, and the company was spending too much maintaining vehicles.

“We had a bunch of trucks and a lot of people running around here,” he said. “I simplified it because it was too expensive.”

Today, the company has about seven employees and higher sales than in the 1970s, when it swelled with employees. The company does about $1 million in sales annually; in the 1970s, that figure was about $600,000 to $700,000, Phil said. Phil’s son, Mac Weisenberger, serves as the president and CEO now and operates the business. Phil is semi-retired.

“We have a niche market,” Phil said. “Our primary business is food service, the hotel and restaurant business. Up until 1975, we were completely retail.”

The mill sells to distributors who funnel the company’s product to various locations. It also creates custom recipes for boutique-type retailers. One retailer in Georgia wanted the mill to create and package a specialized scone recipe made from only dry ingredients. Phil himself worked on the recipe until he concocted something he liked, and the store’s customers loved, he said.

The mill also has a brisk Internet business. The company has had a Web site, www.weisenberger.com, since the late 1990s, Phil said. It has received some plugs through some national publications that have helped get the word out. Customers don’t seem to mind that they often pay more in shipping than they actually pay for the product, because of the fact that the products are dense and heavy. “We think that it reaches a market we probably wouldn’t reach otherwise,” he said.

Robyn Davis Sekula is a staff writer for The Lane Report
editorial@lanereport.com