N.H. Bragg & Sons might be winners of the real Survivor game. This Bangor, Maine-based general-line distributorship is celebrating its 150th year in business, still owned and managed by the same family. (See cover story, p. 40.)

The odds against them reaching this goal were high. Less than 30 percent of family-owned companies make it to the second generation, barely 10 percent make it to a third, and only 4 percent make it to the fourth generation. N.H. Bragg & Sons is now run by the fifth and sixth generations.

So why has N.H. Bragg succeeded where so many others have failed? John Bragg, N.H. Bragg's president, says there is one key ingredient that links his predecessors and himself: putting profits back into the company. That premise has worked out well for N.H. Bragg & Sons. John Bragg says an avoidance of heavy debt and a strong cash position have allowed his company to withstand the cyclical downturns that have impacted so many other small businesses.

Here are some tips we've learned from experts, and from our own observations over the years, about survival of the family business:

• Have clearly defined roles. Each family member should know his or her role. There should be a clear delineation of those roles. Only one person can be in charge. One company that we know has a written plan of responsibilities and compensation structure.
• Have a proper succession plan. All too often, the founder/president/owner of a family company doesn't let it be known who will succeed him. We've heard numerous horror stories about succession problems. It's a sure way to kill a business.
• Invest in the company. Huge salaries, bonuses, stock payments and luxury cars for family members may be the kiss of death for a family-owned company.
• Proper estate planning. Talk to some tax and financial advisors before leaving the company. Estate taxes can ruin a company and cause its demise.
• Use outside consultants when necessary. Getting help from the experts can lead to a healthy bottom line. N.H. Bragg did this a number of years ago and as a result changed some reporting structures within the company.

Our 57th Annual Survey of Distributor Operations shows that most distributorships are still family-owned. Keeping them around for future generations means investing in them today.

jkeough@reedbusiness.com