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Managing All in the family: B.C. business shares secrets to 51 years of success

Every business faces obstacles, but there are some that only family businesses can appreciate. In this new series 50 years, we scour the country in search of family businesses that have stood the test of time and ask them to share the keys to their success.

In 1963, Neil Klassen became an entrepreneur when he bought his first truck and hauled sawdust and firewood from local sawmills to farms.

Fifty-one years later, Valley Pulp and Sawdust Carriers Ltd. of Abbotsford, British Columbia has 26 trucks and 65 employees (22 are family members, including four second-generation and six third-generation Klassens). A black and white photo of that first truck hangs on the boardroom wall of the company, located on the farm where founder Neil and his wife Rita, now in their 80s, still live.

While hauling is still a large component of the business, Valley Carriers now includes a retail landscape supply store, a logging component, grain hauling, wood recycling, supplying bagged wood shavings for horses and retail packaging of wood chips for barbecues. They also operate from Mission, Maple Ridge and Merritt, BC.

Last year, the company received the Vancouver Family Enterprise of Year Achievement Award.

Like many of his relatives who came to work in the business, “the opportunity is the first thing that presents itself and you don’t know any different,” says Neil’s grandson Travis Klassen, who is now the CEO of the business. “I came here every day after school to sweep the shop or work in the retail landscape supply shop. At an older age, you see the opportunity to take the business to the next level.”

Several children in the second and third generations tended to follow the same path as their parents, says Mr. Klassen. “My oldest brother is the chief mechanic and his sons found themselves in the shop. My dad was a driver and dispatcher and my brother followed in his footsteps.”

Mr. Klassen opted to handle paperwork. He was the first person in his family to pursue post-secondary education and is a graduate of the Family Enterprise Advisor Program at the Sauder School of Business at UBC, which he says has been invaluable in charting the course for Valley Carriers’ future.

Until 2008, the Klassens never held business meetings. The transition from an informal operation to a corporation with structure, defined vision and values, an executive team and board, has been the biggest challenge in its 51-year history, says Mr. Klassen.

“It was a challenge to convince them (his relatives) of the value,” he says. “There was definitely some resistance to change. We liked to call ourselves a small family business and I was guilty of that, but now I say I manage a trucking company. It’s was our minds keeping us small and the challenge was addressing those things.”

He says the “numbers on paper” – like multimillion dollar budgets and net revenues – were almost too intimidating for the second generation to deal with. They were modest about talking about the business in a big way.

“Certain dynamics exist in a family enterprise, and every day you’re working with grandparents, cousins and uncles, and the familial relationships mix with business,” says Mr. Klassen. “Sometimes they have to be reminded ‘that’s a family thing – let’s talk about business.’ You can have an opinion, but it’s not necessarily your call. There was a challenge for everyone to understand their roles and while our situation has normalized, it was daunting for awhile.”

“Even though we struggle sometimes with growing, together as group we believe in growth and change,” says Mr. Klassen. “In the boardroom, we have 10 people with very unique views and we know where each is coming from. We look at the company as a stewardship and we are stewarding it along for the next generation. We have each other’s backs and when an outside force comes at us, we get together to protect what we have as a family.”

The current challenge is working on a transition plan for the second generation workers who are now in their 60s.

“I only became CEO in spring and restructuring took a lot of trust, late nights and talks,” says Mr. Klassen. “One of principals we had was to respect the past and embrace the future.”

The company has recognized the value of post-secondary education and younger Klassens are encouraged to pursue a trade qualification, college or university education.

“The oldest members of the fourth generation are turning 13 and starting to get the itch to work here,” says Mr. Klassen. “All of us came from high school to work here but we want to change the pacing a bit and we have the resources to facilitate entry into post-secondary education. When you send kids out there, they come back with a much broader range of understanding and experience.”

The company has faced challenges common to the trucking industry the company has faced include the cost of fuel, driver retention and fierce competition. It’s also weathered challenging economic times in the forestry sector related to fluctuations in lumber prices and B.C.’s pine beetle epidemic.

“We see challenges as an opportunity,” says Mr. Klassen. “When the pine beetle became an issue for the lumber sector, we expanded our operations to include our first foray into log hauling, eventually transporting affected-pine logs for use in the pulp industry.

“There have been recessions, but we haven’t really felt them – the family bears down and evolves and changes. We are a nimble organization and can usually find a new window of opportunity.”

The trucking part of the business continues to expand and the current strategy is to double business in the next three to five years, adding new routes and locations and expanding the wood shaving market.

Valley Carriers also remains committed to the community locally and beyond. When Neil Klassen started the company, he aimed to give 50 per cent of the profits to missionaries in Africa. Since then, the Klassen Foundation has been established and supports a wide range of charities including church organizations, children’s camps and the arts. The biggest cause is youth homelessness and the Klassens two years ago donated a 10-year lease to a local organization to provide a home for six male teens.

And while founder Neil is not as involved in the day-to-day operations of Valley Carriers, he’s still very much a presence.

“Grandpa lives on the property near the business and when a new piece of iron rolls in, he wants to see it,” says Mr. Klassen. “We got a new truck last week and when it arrived, he climbed right into it. He wanted to feel our growth firsthand.”

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