“We’re not a flat organization, like many small firms in this business. We spread our risk by diversifying, acquiring rep and service companies. A lot of people are starting to do more of that. It’s the nature of the business.” Mike McGuire, Managing Partner
ESOP: Welcome to the Family
Columbus, Ohio
It’s been almost 25 years since Skip Zink, founder of Columbus, Ohio-based Zink Corporation, a business that would go on to become one of the largest manufacturers’ rep firms in the foodservice space, handed the reins of his family business to the next generation. “He had a plan,” recounts Mike McGuire, who is co-managing partner with his brother-in-law, Skip Zink’s son, Jim. “Skip looked around at his peers who were still running their businesses well into their eighties and asked himself, ‘What are they still doing there?’” Skip Zink’s other son, Tim Zink, is also a current partner and serves as chief commercial officer.
The managing partners immediately launched into growth mode, buying service agents and smaller rep companies while forming strategic alliances with other rep firms. “Within 15 years, we’d grown to the point that we were attracting attention by private equity rollups, but we had no interest in being acquired,” says McGuire. Crediting the guidance of “good advisers,” the co-managing partners future-proofed their company by launching an Employee Stock Ownership Plan (ESOP) in 2017.
While a few companies in the foodservice industry today have ESOPs, it was a fairly bold move at the time, and one that McGuire expects will leave the current leadership team “with a lot of runway to continue the business — at least another 10 years.”
One benefit of moving to an ESOP is how it provides improved recruitment and retention of talent. “It’s the first thing out of our mouths when interviewing prospects,” says McGuire, acknowledging that it can be difficult for Zink to compete with tech firms when seeking new talent. “But this helps us to make a good case.” Plus, it provides peace of mind to all that the company will sustain itself without the stress of changing ownership. “You need that continuity for effective management,” he notes.
In addition, ESOP has helped Zink in its own acquisitions. “It makes us more attractive when we’re able to tell a small family business that we will fold their team into our ESOP.” Zink’s ESOP structure and employee-focused corporate culture may prove beneficial if the company continues to grow via acquisition. “In the beginning, we went after companies. Now, we’re getting approached a lot more by companies wanting to sell to us,” McGuire says. “The equity market has changed,” he continues. “They’re looking for new segments and finding their way here.”
Characteristics of Family Businesses that Endure
- Strong succession planning
- Solid governance structure
- Attention to and investment in technology and digital transformation
- Embracing a culture of innovation
Source: 2024 Family Enterprise Survey, Deloitte Private
