Family Business

50. Managing the Dynamics of a Family Business | Spruce Industries

Episode 50

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This week, our special guests open up about the sometimes difficult to navigate dynamics of running a family business in the distribution industry. While so many companies are going through mergers and acquisitions, as new generations move away from the traditional takeover of the business, some companies like Spruce Industries are doubling down, as the newer generations are taking the reins and leading the company into the future successfully.

In this episode of Driven by DCKAP, Karthik Chidambaram, Founder & CEO of DCKAP, speaks with Hank Josephs and his two sons, Daniel Josephs and Michael Josephs – respectively the President, CEO and CFO of Spruce Industries. They discuss the challenges and advantages of running a family business, what to do and what not to do, including how to successfully navigate the difficult roads, the importance of keeping open communication, and the best way to steer the company into the future.

Book mentioned in this podcast:
“With the Old Breed: At Peleliu and Okinawa” by Eugene Sledge
“The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure” by Greg Lukianoff and Jonathan Haidt
“So Good They Can’t Ignore You: Why Skills Trump Passion in the Quest for Work You Love” by Cal Newport


Karthik Chidambaram: Hello, everyone. Welcome to a brand new episode of the
DCKAP’s Driven Podcast. We are very excited today because we're going to
talk about family business.

And we have three great men joining us, Hank Josephs, Michael Josephs and
Dan Josephs with Spruce Industries, one of the fastest growing
Jan-San distributors, janitorial supply distributors, in the country.

They're based in New Jersey. And I'm really excited today, to have father,
son and son. So it's awesome to have three of them on the same frame. Thank
you so much, Hank, Michael and Dan, for joining DCKAP’s Driven podcast.

Hank, Daniel & Michael Josephs: Pleasure. Thank you for having us.

Karthik Chidambaram: So, Hank, I'm going to start with you. Can you tell us
about the Spruce Industries business?

Who started it? When did you, if you started it, when did you start?

Hank Josephs: The company was started about 75 years ago, by a family in the
Union County, New Jersey area. And I got involved with them about 10 years
later, 20 years later probably. And they were struggling with transition.
They had children that weren't, some weren't, interested in the business.

And I took a flyer and risked everything I had, both my boys' college
education, left a pretty big time job, and borrowed enough money and bought
the business. And, basically thought, because I was a relatively big shot in
a big company, that I knew everything about distribution and Jan-San. And I
basically found out in the first six months, I knew nothing.

So it was a huge learning curve. Very nervous part of my life, where I had
everything at risk, but we worked hard. My wife and I worked hard at it. We
worked together, which I don't recommend to a lot of people, but we were
able to gradually get out from under all the loans and we successfully
navigated the marketplace and I've been doing it- Friday or Thursday will be
our 40th year that I've owned the company.

Karthik Chidambaram: Oh, that's amazing. So, the company was started 75
years ago and you bought them 40 years ago. It started 40 years ago. That's

So Hank, I've read a little bit, or I've read extensively about the Spruce
Industries business and we also work with you so it's exciting. Appreciate
the opportunity. And it's in your family DNA, right? Spruce is in your
family DNA. And when both Dan and Michael were growing up, did you always
want them to get into the family business, or how was that?

Hank Josephs: That's a great question. If you own a family business, you are
involved in it 24/7. You never go- when you go on vacation, you're never on
vacation. You're always attached. You're always worried.

Every night, my wife and I would come home and the boys would be in school
and have their afternoon activities and we'd talk about things over the
dinner table. We always had dinner together and they would hear us (my wife
and I) talking, sometimes arguing, sometimes fighting, about different
issues and different customers and different problems.

So, they grew up around the business, but it was never an attitude that we
had, both my wife and I, that they were expected to come into the business.
We basically worked our behinds off to make sure that we could provide them
with a healthy living, a lifestyle, and college education. And then from
that point on, whatever they decided to do, I wanted them to be able to do,
unfeathered, without debt, and move forward in their lives.

So, you know, during the summers and a little bit of high school and
college, when they came home, they worked for us, both of them worked for
us, whether it was in the warehouse, in the office. Mike would, you know,
handle a lot of stuff with the operational stuff. Dan was involved in
computers. He's an engineer by trade, helped his mom.

So it was, truly, they weren't flipping hamburgers anywhere. Or they were,
and then they went off to college. They had their internships, various
internships, and then they went off onto Wall Street, and that was fine for
us. We were very happy. The business had grown, was growing. We were

And then gradually, I mean, there was this- Well, Dan can explain more about
how he decided to change his career, and Mike also. But we always discussed
the business. It was never- they knew everything, and we didn't hide
anything, and when we were upset, they knew we were upset, but we were able
to provide and continue, and it was very positive.

Karthik Chidambaram: Yeah, no, I think it's awesome. No, I think that's
great. Right? So thank you so much Hank for sharing that side of the story.

Let me ask you Daniel, you know, you worked at JP Morgan for over five years
and then, did you always want to come back to the business? Like your dad
was not really- it's not like, hey, you know, you need to get into the
family business. So what made you choose to work for Spruce?

Daniel Josephs: There was never even a thought in my mind after graduating
that I was going to be doing this. It never crossed my mind. I graduated
college and I got a job working for JP Morgan on the software engineering
side, and I really enjoyed it. I really enjoyed what we were doing. The
company was actually, for a bank, it was pretty small at that time. We were
about 10,000 employees. It felt like a family. It was a really great

And then about two and a half years into working there, we ended up merging
with Chase. Obviously Chase acquired JP Morgan. It was a huge acquisition.
Our 10,000 employees became 200 and something overnight. The culture changed
a lot. It became much more the culture of Chase. And I started getting
feelings that it wasn't going to be the same.

And then about another six months after that, maybe it was a year after
that, we merged with Bank One out of the Midwest and we became, I don't
know, close to a half a million employees.

I felt like it was a small country. It was hard to navigate. You couldn't
get promotions. There was a long line of people ahead of you trying to do
the same thing. And I started looking around at other opportunities. Maybe
it was other banks. And I remember telling my father about what was going on
and just, I was unhappy with what was going on.

So he says, ‘why don't you, why don't you come work for me?’ And I thought
he was half kidding the first time he said it. I sort of dismissed it and
kept going with what I was doing. And then he said it again, very casually.
And I said, ‘I don't know what I'd be doing there. I don't know how to sell.
I don't know what's going on.’

He says, ‘well, why don't you try taking vacation? Take a week's vacation.
Come in and I'll drive you around. I'll show you what's going on. I'll teach
you what we're doing now. And you see how you like it. After the week, we
can sit down and discuss. And if you don't like it, then you keep
interviewing with what you're doing.’

So after the first week, I remember, I ended up calling my boss back at J.P.
Morgan. I said, something's going on at home. I need another week. So I did
two weeks. I felt like the first week wasn't enough to really feel what was
going on. And at the end of the second week, I sat in Hank's office and we
were sitting there having a conversation.

And he just casually said, ‘So what would you do differently?’ And I looked
at him with 12 eyeballs and said, I don't know. I mean, I've got ideas, but
what if they’re wrong? What if I've been looking at this for two weeks, and
what if they’re wrong? He says, well, then we’ll try something different.
And that idea of the- you try something, if it doesn't work, you pivot, you
try something that does work, you pivot, was really engaging for me.

It wasn't something that I ever experienced working for the bank. You know,
you used to have meetings, then meetings, then meetings about meetings.
There wasn't that. ability to pivot quickly and do something different, if
you saw something or you had to change.

And after that meeting, I remember we sat down and we're like, ‘all right,
we're going to do this, but we're going to do it right.’ So I ended up going
back to work for JP Morgan for another six months. I ended up- he put me in
touch with other family businesses in our industry. Ones that were
successful in the family business, ones that were not so successful.

And I talked to maybe six or seven different people, heard a lot of
different stories, took a lot of different notes. He spoke to a lot of
people as well about the same thing, so did my mom. And then after those six
months, I quit my job and started working for him. And it's been an
adventure ever since.

Karthik Chidambaram: That's amazing. So, you started in the business 20
years ago. So that's great. But Michael, you recently started with the
business, but you're the older of the two. That happened 20 days ago?

Michael Josephs: Yeah. So I took, as my dad said, I also started on
Wall Street after college. I spent about 15 or 16 years in investment
banking, covering all things media and entertainment companies, helping them
raise capital, execute mergers and acquisitions. And I loved it. I loved
what I did, until I didn't, at which point I sort of saw the light, which
was the other side of the table. Instead of being an advisor, actually being
a principal, and being an owner, and being an operator. And I moved over to
the operating side of the business. I joined a company and ran mergers and
acquisitions and strategy for about 10 years. For the last 10 years or so.

And at that business we started, again, it was in the media and
entertainment space. We started very small. And then we executed a whole
strategic plan to transform this business. We went through about 40
acquisitions and joint ventures and partnerships and built what was a sort
of one-dimensional radio, old school business, into a multi-dimensional,
multi platform business.

And it was a ton of fun. But again, it was not mine. It was not something I
had a small ownership stake as a public shareholder. It was not exactly, not
exactly the end game. But I have always had this sort of entrepreneurial
itch, and I've sort of had night jobs where I've helped people, you know,
think through their strategy, think through their plans, think through where
to go next.

I worked with a number of startups, and venture capital firms, helping them
help their portfolios, think through what's next. And then, the only time I
really interacted on a business level with either my dad or my brother was
when they would get a phone call, hey, are you interested in selling the

And those phone calls kept coming fast and furious. And we would meet over
lunch, right off the New Jersey Turnpike. And one day I said, well, wait a
minute. What if we flip the script a little bit? And instead of selling,
what if we went and acquired companies? And Dan said, I've never thought,
I've never had the headspace to think about that. We're so busy running the
business and solving those problems. What would that even look like?

And that's always been my skill set and thinking through a landscape, an
ever changing landscape, which certainly in the Jan-San space is today,
there are a number of private equity backed companies in the space that have
rolled up, you know, lots and lots of companies.

I think the statistic was, there were 25,000 Jan-San distribution businesses
about 10 years ago. Now there's less than 2,000. So there's been a ton of
consolidation already. So that's one side of it. And then the other side of
it is, this is an industry in transformation, and that's where, you know, I
can help see around the corner because I haven't been doing it for 20 years.

And so we, the three of us, spent a lot of time before I decided to jump
into this, talking about what we can do with the core business. Put
acquisitions aside because that's down the road that we can, we can do that.
That'll come, but what else can we do with the core business? What haven't
we, what haven't you guys had the chance to try, that you've been thinking
about because you've been heads down.

And so, I don't know, a couple months ago we just decided. Now is the right
time, and let's jump in and do it.

Karthik Chidambaram: It's very interesting, and you talked about
consolidation, and with so much consolidation happening in the industry,
especially the Jan-San industry, how do you think that affects Spruce?

And, what is that, you know, is unique about Spruce, which makes you
differentiated in the market?

Daniel Josephs: So, I could speak on that, on what gives us a competitive,
at least we think, it gives us a competitive advantage. Customers are either
looking for certain characteristics of who they're going to buy from. Either
they're looking for speed and best price, and they're not looking for the
interaction, or we find that there's a customer base that's looking for a
competitive price, a product that gets there at a good pace. But they want
the expertise, they want the training, they want the knowledge, they want
the friendly touch.

And I think there's a major distinction than there ever was before. There
used to be a middle ground of a lot of larger, call it, 50 million to 150
million sized businesses, distribution businesses in our industry. They're
gone. So, there is now a large gap between the growing, small to medium
sized, businesses. And the exponential size of the private equity backed

And it's been a huge opportunity for us. One of the things that I tell the
sales team, and I talk about it with the customers as well, one of the
things that gives us an advantage is, customers like to pick up the phone
every once in a while and yell at somebody, if the case may be, and for the
ability they have to pick up the phone and call me at any point in time, let
me know the positive and negative of what's going on, is something that I
can solve immediately. Versus having to pick up a phone, dial a robot,
figure out where you're going, the next person you get on the phone with,
and then you don't even know who you're talking to, and it's a big struggle
to get something done.

That, I think, is our biggest competitive advantage at the moment, and I
think a lot of that gives us, the same reason that I wanted to come into
this business so long ago, is the way we could pivot quickly and change on a
dime and change what we're doing. Add a revenue stream, take away a revenue
stream, go into a different target market quicker than probably a larger
company could do that has to go through a lot more logistics to get it done.

Hank Josephs: One of the things that I've always said over the years is that
a company like Spruce versus a company like some of the mega companies when
they want to make a change, is they have to make a change like an aircraft
carrier. It takes them miles to make the change. If we need to pivot or make
a change, as Dan is talking about, we're a PT. I grew up with the PT-109. We
can make a change in a heartbeat.

And that's the quality that a lot of people look for is the fact that we
have people answering the phone, they identify themselves, and they don't
put you on hold, they try to solve a problem, or get some answers to you.
So, those are the things, and I watch with great pride in, that the boys and
I understand that concept and are taking it to the next level. Which I could
have never dreamt possible if Dan hadn't come into the business nearly 20
years ago. I would have been long gone like everybody else, like all my
friends and all my competitors.

But because he was there and we worked together so well over the years, and
Mike was always around… I mean, there's times that we would sit down over
dinner. Thanksgiving dinner, or whatever, and talk about things and we would
listen to what Mike had to say, because from a financial perspective, Dan
and I were operators running at breakneck speed.

We knew we were making money, but we didn't have a-

Michael Josephs: A model.

Hank Josephs: Yeah, a model that we could plug in.

Daniel Josephs: I still tell everybody this. It's like we're going down the
highway at a hundred miles an hour with the doors off. Things are flying out
the door. Things are flying out the trunk, but we're still going forward and

Karthik Chidambaram: No, it's very interesting that you say that. And I'm
really glad that both Dan and Michael are in the business. But what about
families out there, where the kids do not want to get into the business? How
do they deal with it? Is it like, hey, you know, is it just consolidation is
the answer, or what happens?

Hank Josephs: These families, and I hear about it, people talk about it with
me because they're all jealous, and I'm the luckiest guy. I tell everybody
I'm the luckiest guy on the face of the planet that I have two sons that are
seriously interested. If you don't have that, you can't make your kids
involved in something that doesn't interest them.

Listen, they both are college graduates, University of Michigan. There's
nothing glamorous about selling toilet paper and paper towels. But it is a
way to make a living and it's a way to make a good living. And if you're
willing to work in that, with that thought in mind, then the family should
be involved in it.

But if the kids have this arbitrary idea where they want to go. You just
gotta let go and get what you can get out of it, and get out in one piece
for yourself.

Michael Josephs: I could say this, having been here for you know, a little
bit more than 20 days but not more, you can't force someone to do this. You
have to want to do it because it is- it's not glamorous. There are tedious
things that just have to get done, but if you look at each other, who's
going to get- we're going to get it done because it's got to get done or
else it doesn't get done.

And so, if you have a family and you don't have a succession plan in place,
you're either looking to sell to either another party in the industry, maybe
you set up an ESOP and you sell it to your employees. People have done that
successfully and that works fine. Yeah. If you're in the Jan-San space and
you happen to be in the Tri State area, you should call us, because we're

But, you know, I- You can't, you can't do this by mistake. You can't do this
by happenstance. You have to be intentional about it.

Karthik Chidambaram: No, that's great, right? You really can't force anybody
to do something. It makes a lot of sense.

Another follow up question on this, right? So there are pros and cons to
this. And you guys have been in conversations about the business. Let's say
you have a great day in the business, you know, it's awesome. But let's say
you don't have a good day in the business. Does it also reflect at home? How
do you deal with that?

Because that's a problem, right? A working relationship is different than a
personal relationship. And these are your sons, right? So how do you deal
with that?

Hank Josephs: Well, it's not easy, but we've had, my wife and I and the
kids, have seen over the years, how we handle it. I mean, we had many, many
bad days, and we dealt with it and we discussed it and we didn't hide
anything, because they knew there was some risk that was going to be dealt

But you talk about it. I'm always about getting it out on the table. Don't
hide anything. And it's- sometimes it's pretty hard. But we, as a family,
have always felt if we can be honest with each other, not hide anything, be
transparent, you can work through those tough days. And then you really get
excited when you have those great days.

Try, you just try to get more great days than bad days, and that's the

Karthik Chidambaram: So, transparency is the answer.

Hank Josephs: In my opinion, transparency is the only answer. There's nothing
that I will hide from my boys about the business. And I also, now as we go
forward, I don't push issues that I have. I mean, I make suggestions and
then I shut up and I let them because as I've said to both of them, the
consequences are now yours, not mine. So that's how we're transitioning, to
go forward.

Karthik Chidambaram: You know, and the world is changing at a very fast pace
right now. And you gotta be really, really skilled. I mean, luckily you have
very smart boys and it really helps. But sometimes, right? So let's say
family, you know, it's not just about the immediate family, right?

You know, it could be an extended family who was also working in the
business or it could be your own son and daughter. But let's say they don't
do that well. Okay. And then, hey, the performance is not up to the mark.
But let's say if it's an employee, you would let them go. But then if it's
family, then what happens?

Hank Josephs: Well, it gets very difficult, and we have real time, real
situations where we had to deal with it. I will tell you that when I bought
the business, my father-in-law was my first hire. He was an excellent, their
grandfather was an excellent salesman, didn't have any experience, but all
he cared about was his son-in-law's success.

I brought in my mother to make collection calls, because nobody worries
about their son's money more than their mother. So she used to come in. And
then we hired my sister-in-law, my wife's sister. And that didn't work out
so well. And it became a conflict within the family. And a conflict within
the business that affected the everyday-

Daniel Josephs: That wasn't necessarily a performance issue. That was a-
I was going to say personality differences. So, you know, my aunt,
Hank's sister-in-law wasn't- I was there for a lot of this. It wasn't a
performance concern. And I think a lot of the reasons why a lot of times
family structures don't do well is personality traits. So, you have to have
a mesh of a personality in order to make it successful.

It's not just, well, I agree the number one thing is transparency. I
wholeheartedly agree with that. Even if you have transparency, if you are
having personality trait issues, it's going to struggle to be successful at

I'm on a board where I sit with a bunch of other family owned distributors
like us. And there, that exact question you're asking about, what happens if
a family member doesn't perform, comes up a lot. And there's various
different things that the companies have done. They've moved them into roles
where they're supporting cast. They've moved them out of the business but
still gave them equity in the business.

You have to get creative. It's not as easy as just letting an employee go.
There are ramifications and, if not done well, I've seen and I've talked to
family members of other companies that don't talk anymore. Whether it be 10,
15, 20 years later. So, it is a very delicate situation. And when Mike was
coming on board, we tried to lay it out as best as we can that our
relationship will change.

It will never be the same. For better or worse, it will change, coming on
board. It's not gonna stay status quo. But it's on us to pick which
direction that's gonna go. I happen to think it's a personality match, more
so, much more like my father and I. Whereas my mom and I, it was a
personality clash, and it was something we had to navigate around.

We had to figure out how to do that and how to work with two people with
very emotional, volatile personalities and how to work around that. Which we
did, for 15 years, I think about 15 years. Yeah. So it is- it's multifaceted
how to make it successful and it could very easily crumble really quickly,

Michael Josephs: As I was really thinking hard about this, joining and it was- well,
we're gonna get into fights. We're gonna get into arguments. We're gonna get
in each other's way, and Dan said, yeah, but I know your intentions are
always going to be in the right place. Your intentions are always going to
be trying to move the business forward. We may disagree on how to get there,
but I don't question what you're gonna be trying to do, and that is
important, and that was actually really important for me to hear.

Because I know that we're gonna fight and we're gonna disagree on different
things. Because we do have a very different style. A very different approach
and a different skill set. But I think, ultimately, if we can stay true to
that and understand that we do have each other's best intention and the
business's intention, best interest at heart and motives.

Michael Josephs: Yeah. Share motives.

Karthik Chidambaram: Yeah. We just talked about the three of you, but I
would like to know the role of your wife, right, into the whole business.
What role does your wife play?

Hank Josephs: Well, when we first bought the business, it was quite clear to
both of us that I knew a fair amount of how to sell and how to manage sales
people because I did that for a very large company. And I figured, there's
enough about the logistics and the warehousing and the purchasing.

Finance? Not happening. Okay. I don't think in my lifetime I've written 20
checks. My wife has handled all of our financials, both on a family basis,
and then when I decided I wanted to do this, I needed her approval. She
worked in a bank. She's an accountant. She worked in a bank, and she had to
give up her career to work with me and handle all the finances.

So, it was a decision that we made together that we would split the
responsibilities of the company. You know, you're handling the finances,
insurance, and all that stuff, and the money, and the checking account, and
I'm handling all the other stuff, and I may suggest to you that I'd like you
to pay this bill sooner than another bill, because otherwise I'm not going
to be able to get the product to fill the orders. But it's your, it's your
choice. You decide.

So that was how we managed to work together and raise two boys. I mean,
Connie was there at most of their basketball, football, soccer games, and
basketball and baseball games. I rarely made some, a lot of them, but she
was always there, but she was always there every day.

You know, we’d come in separately, two different cars. The minute she'd come
in, I'd leave. And I'd spend the day out selling, leading our sales team,
leading selling. And then I'd come back and deal with the other stuff. And
then she would get in the car and go home and take care of them. And that's
how we did it.

And when Dan came in, it was very similar, except they spent a lot of time
together. So, and that's how you gotta do it. So she retired. Six years ago,
six-seven years ago, never let go, still won't ever let go, because it's in
our DNA as you started this whole conversation. It's in the family DNA. She
has never let go.

I've let go on a lot of things, but it's still, you know, it's our baby. We
took it from near disaster to where we are today. And it's- so every day she
asks, speaks to the boys, what's going on?

Michael Josephs: And I'm, I'm physically sitting in the office she sat in
for years. So I've yet to, but mom, I am going to be redecorating. It's coming soon.

But I found old ledgers, like handwritten journal entries.
It's crazy. But yeah, she's always asking questions, and pushing to, you
know, help make decisions, which is good.

Yeah. And what my mom did is part of the business. But so, no, so she's not
involved in it.

Karthik Chidambaram: Sure. Dan and Mike, are your kids interested in the

Daniel Josephs: They're a little young. I've got an 11 and almost 8 year
old. I think on some level they might know what we do, but not much. They've
been to the warehouse. They've been to the office a lot, especially if snow
days are days off, they'll come with me. But they, you know, I- the same way
that we were raised is the same way I plan on raising them. It is an open
option. So they can choose.

I'm sure when it comes to high school or, you know, and they need something
to do, I'll have plenty for them to do with the office, but I won't push it.
As to what Mike said before, you have to want to do it, it has to come
naturally to you.

Hank Josephs: My grandson, Dan's oldest son, happened to mention to my wife,
he said, ‘Grandma, I'm thinking maybe when I grow up, maybe I can work with
my dad and my Uncle Mike.’

Wow. Well, when you hear that as, you know, a grandpa and as somebody that
worked your whole career at this, there's nothing that I could think of that
would be any greater than another generation of Joseph's running Spruce and
handling it going forward.

Daniel Josephs: Talk about a personality clash, that would be a tough one.

Karthik Chidambaram: So it's amazing and it's very inspiring that you tell
that. So what parenting advice would you give our audience? You know, you've
raised two really smart boys, you know, any parenting advice you would give?

Hank Josephs: Well, I- that's a hard one. You do it by the seat of your
pants. My wife and I were very young when we got married, and we were very
young when we had kids.

We did the things that our parents taught us, that we learned from our
parents, on how to raise kids. So we tried to instill in them a lot of
feeling about schoolwork and doing the right thing and playing sports and
getting involved with your life, other than idle time. I don't know if I can
quantify it.

I mean, they hopefully could- Sometimes I hear them say things and do things
that I said, ‘Oh my God, they really were listening and paying attention.’
So, you know, and they both have said, you know, why is it that I can't find
that person or that personality that you had in our lives? Why can't I find
that person in my life like you did?

So I know, whatever we did, it seemed to have resonated on both sides, and
they do have distinctly different personalities. But, you know, I hope that
they get the best of both my wife and I's, you know, attitude about doing
things. And I see my grandchildren, and I see great things in my
granddaughters, who are older, 16 and 14, and I see them, you know, growing
up to be beautiful girls, beautiful women who have their heads on straight.
And I couldn't be more proud.

When I had the opportunity this holiday season, Mike was generous enough to
ship them down to grandma and grandpa, to Florida, to our place. And we got
them for five days uninterrupted. A joy watching them interact with our
friends and family. I mean, not our family, but friends and their family and
watch my girls just captivate these people. I mean, it's. Doesn't get any

Karthik Chidambaram: Yeah. Awesome. You know, so they have been listening as
kids and they've been imparting that knowledge on their kids. You know, it's
really great.

Hank Josephs: Yes.

Michael Josephs: Yeah. And getting some good contributions from my wife as
well. Yeah. She’s done a great job with the girls, so.

Karthik Chidambaram: That’s awesome. Absolutely.

So, talking about money, right? Wealth. So, do you differentiate between the
family wealth, personal wealth and the business wealth, or how does that

Hank Josephs: Well, I can tell you from our history it's you either take it
from the left pocket or the right pocket.

Karthik Chidambaram: Sure.

Hank Josephs: But it's the same pair of pants. And a lot of people say, well
what's the big deal? You just take it out of the business. Well, you don't
just take it out of the business. So when people say that, I know they
clearly don't understand the dynamics of running a family business.

So if, like I said, and I tell people all the time, if I take it out of this
pocket, it doesn't make a difference, or I take it out of the other pocket.
Same money, all goes to the same purpose and focus. If the company does
well, the family does well. If the company is struggling a little bit, the
family struggles a little bit. It's all tied together.

Daniel Josephs: Some things that I've learned and we talked about with a lot
of other competitors that I have is you either could have a lifestyle family
business or you have a family business that's built for growth. And both of
them are okay, and both of them are fantastic, and you could be very
successful in both of them. If you are a lifestyle business, your business
is predicated around making sure that your family is comfortable and living
the way they want to live.

And that's something to be desired by a lot of people. If you have a family
business that's designed for growth, you're looking to put money back into
the business to acquire, to do different things, to make investments in
sales team, to make investments in purchasing larger warehouses, to putting
money back into business to grow further on so that there might be larger
money down the pot.

But both of them, I think, are fantastic business models. You just have to
choose which one you want.

Michael Josephs: And I think it doesn't have to be just one for the life
cycle of the business because, and we talked- again, back to the
conversations of when I just joined, because it's so fresh in my mind. It
was yesterday. We're talking about okay, I built this financial model and I
said, okay if we do these ten things This business should do you know to
triple in a couple years?

What am I missing? And you said, well, you're not missing anything. I said,
well, why wasn't this done? Well, okay, let me take you back. When we bought
this business, my goal was to send you to college. That was the goal of the
business. To send you and your brother to college. That was it. So there was
no differentiating between personal and business wealth. It was one and the

Now, it's pretty different. Now the business stands on its own. And we are
here for this next generation to grow. And that is what we're trying to do.
So, to Dan's point, there are two different types of businesses. I think
what you're seeing now is a business that's transformed and crossed that
chasm to now become a growth business.

Karthik Chidambaram: Well, that's a great-

Michael Josephs: Does that make sense?

Karthik Chidambaram: I think it's a great insight, right? So it doesn't have
to be the same all the time, you know, it just shifts over a period of time.

So, what do you guys do for fun, outside of work?

Hank Josephs: Well, I play a lot of golf, and I play a lot of tennis. And I
currently am lucky enough to be able to spend a fair amount of the winter in
Florida, which I do. And my wife plays tennis, we play together, we play
golf together.

So, for me, it's great, and I'm still able to keep in touch every day. I
still have my computer in my little office at home. And so, that's my
relaxation. And we've gone, both of us have gone through some health issues.
Dan and I navigated something very major for me, which we were able to deal
with properly.

And so, it's important. I'm about to celebrate a very momentous birthday.

Michael Josephs: In three days. Two days.

Karthik Chidambaram: Happy birthday.

Hank Josephs: Thank you. And I'm lucky to be around. And, you know, I
attribute that to the fact that every day I get up and I'm doing something.
I'm not sitting around on the couch. I'm not watching a lot of TV.

Karthik Chidambaram: I play some tennis too and I would love to play some
tennis with you someday.

Daniel Josephs: I actually got into golf as well. Over the last three, four
years I got really into it. I found a good group of guys and we play a lot
of golf together, go on some golf trips. So a lot of my free time is spent
around that.

And the other time is spent redoing sixth grade and second grade. I am, I
can tell you that my math in sixth grade is much better the second time
around. So a lot of the focus on helping the kids get through school.

Karthik Chidambaram: That's awesome. You know, spend time with your kids.
Yeah. That's awesome.

Michael Josephs: Yeah. I also like to play golf, tennis, go out and cycle.
Out riding, enjoying the fresh air and then I'm on the sidelines for my
kids’ sporting events as often as I possibly can, because I know that does
not last and they're not going to be playing in college. So, there's a few
short years left to really be with them and enjoy them while they're home.
And so, then we like to travel as a family.

Karthik Chidambaram: That's awesome. Travel as a family is fun.

We usually like to end the Driven Podcast with this question, which is, what
book are you reading right now?

Hank Josephs: So, well, I'm currently reading a book, it's called 'With the
Old Breed', by Eugene Sledge. It's about being a Marine in World War II during
the 1944-45 campaigns of Peleliu and Saipan, and it was my father in law,
who was a Marine until the day he passed away, he was a Marine and he was
there in both places.

And he never talked about it, but I did a lot of reading about him. My dad
was in North Africa. Behind the desk working with the Army Air Corps. But my
father-in-law when I got him to talk about it, I started reading volumes.
And I've read, I've written, I'm sorry, read a tremendous amount of books on
it. And I'm always reading, which is what I'm reading now. I read it on the
plane up and I will read more chapters on the way down.

Daniel Josephs: As I said, I'm repeating sixth grade. So, I just finished
'Beowulf' and I am now reading 'Mousetrap' by Agatha Christie. It's a play
that she wrote. So, that is my entertainment is reading books to help my son
get through.

Michael Josephs: I just finished, 'The Coddling of the American Mind'. Which
I don't like to get political. And talk about things that are in transition.
And I think as you get older, you may move. Many people in this country go
from, you know, liberal to a little bit more conservative. And this is a
book that sort of is in that transition. And what has happened to the
American school system and kids in America. And it's, I think it was a
fascinating read.

Daniel Josephs: Very delicate.

Karthik Chidambaram: Yeah, I'm reading this book called, 'So Good That They
Can't Ignore You' by Cal Newport, also the author of 'Deep Work', where you
keep getting better at what you do and eventually you discover your passion.
So, it's not about passion, it's about hard work. So I thought that was a
great book.

Hank Josephs: That's an interesting thing about passion. It's not a word
that we brought up today, but my feeling about success of business in
general, but specifically family business, if you don't have the passion for
it, you're not going to end up in the right place. And I have always had the
passion. And I think I've passed it on to both boys that passion is
something you do.

I mean, I'm passionate about a lot of stuff. I'm also without many filters
anymore, but I'm still passionate about a lot of stuff, especially our
business. So, I'm glad you brought that up.

Karthik Chidambaram: Absolutely. And you work hard and you get better at it.
You know, that's awesome.

So Hank, Mike and Dan, I really enjoyed this conversation. It was great to
learn about Spruce Industries and the family business, how you run it, how
you pass it from one generation to another, the do's and the don'ts, the
conflicts and all that. You know, it was a fascinating conversation.

I just want to say a big, big thank you for your time.

Hank, Daniel & Michael Josephs: Thank you. Appreciate it.

Karthik Chidambaram: It’s been great having you on the show. Thank you.

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