Family run business: H.M. Royal Inc.

Founder: Horace Milton Royal Jr.

Headquarters: Trenton, N.J.

Number of employees: 50.

Key family members active in the company: H.L. Boyer Royal Jr., vice president—key account manager, 1981 to present; Henry Wood Royal, vice president—director of sales, 1983 to present; Joseph Edward Royal, president, 2003 to present; Hardy S. Royal, vice president—key account manager.

What it does: H.M. Royal is a distributor of compounding ingredients to industries such as plastics, rubber and paint.

Number of generations involved in the business: Three.

What are the strengths of a family owned business? H.M. Royal Inc. has continued for 90 years, and successfully made two generational transitions. At the same time, we have diversified and grown the business services that we provide.

Many wise people and smart management decisions have contributed to this achievement. Key among them is the recognition that the family members work for the good of the business, not vice versa.

Every decision is made through the lens of whether it creates value and strength for the business: our customers/partners; and our employees. If we are successful in satisfying those key constituents, the family members will continue with our own personal and business success.

Good financial planning and asset transition management also have been key. With excellent financial, estate and business planning, we have successfully supported the financial needs of the state, local and federal communities we do business in, while retaining the core financial strength of the ongoing business.

To survive 90 years, a business must be flexible and able to adapt to changing times. Of the top 25 customers served by H.M. Royal in 1960, none survive today under the same name. All but one (Home Rubber) have left the Trenton area and the Northeast for other states, or have closed.

If we had not aggressively expanded our geography and markets through the 1970s to today, we would no longer be in business.

Now our challenge is to meet the needs of a global manufacturing community in the 21st century.

H.M. Royal aggressively uses web-based technology to hold training seminars with our international suppliers. We arrange online technical seminars to connect technical development specialists from around the U.S. with global producers of new, innovative technologies for the changing polymer compounding market.

A long-term goal is to develop our own internal library of technical training films, focusing on new technical innovations and also giving basic training on materials use. Many of the experts of our industry are reaching retirement. Chemistry and polymer compounding are not widely taught courses of study. By developing our own internal training, we strive to be an educational asset to the future compounders that will serve the American market.

What are the challenges of a family owned business, such as financing, succession planning, family disagreements? How are they resolved? Gazing into the crystal ball again will require solid planning for the introduction of the fourth generation into the company. No one should be forced to come on board and anyone who chooses must understand H.M. Royal will become very much a part of their life. Consolidation of regional and similarly oriented sales agents and distributors must take place as raw materials suppliers will have a dwindling domestic group of customers to supply.

As the fourth generation grows, their talents must be matched with the company's needs. Consolidation could allow for the continuing growth with related responsibility for this new group of owners. We will need more outside advice from advisers who may be part of a growing board of directors.

Something you may not know about the company: Involvement in civic organizations extends back many years. Family members of H.M. Royal Inc. held key leadership positions by sitting on the boards of the New Jersey State Museum, the Trenton War Memorial, the Trenton Club (now closed), the Trenton Country Club and the Old Barracks Association. H.M. Royal currently supports several local charities.

And one more thing: Our company is built on good people and long-term relationships. We cannot afford to make short-term decisions to deal with short-term challenges. Everything must be planned and managed based on a three-, five-, 10-year time horizon because that long-term success is what truly matters.

Our strategy has paid off, with 2010-14 being some of the fastest growth years in corporate history.

Had we made personnel cuts to deal with the fiscal crisis of 2008-09, we could never have hired fast enough to absorb the rapid recovery and growth rate when manufacturing rebounded.