John Lynch worked for his parents' business farming and making equipment for hog farms. When Lynch's daughters started raising sheep, he made equipment for them and soon realized a demand for products in the sheep and goat industry.
When Lynch took over the family business and decided to transition to making sheep and goat equipment, it did not go well with his family.
One of Lynch’s daughters, Melissa Dalton, described what it was like.
“They wanted him to stay and farm. And they actually disowned my father for wanting to live his dream and not their dream," said Dalton. "So growing up in a family business was a lot of trauma for us too. It wasn’t easy. We saw all the sacrifices my parents did by starting all over again. So for me anyway, growing up and having a family business wasn’t all sunshine and roses for sure.”
Today, Sydell Incorporated is a successful, third generation family-owned business in Burbank, southeast of Vermillion. South Dakota’s sheep and goat industry is the seventh largest in the nation – but Sydell’s reach extends internationally.
Dalton runs the business together with her family. That includes her sister, Stephanie Taylor, who said each family member has their own role.
"Melissa's husband, Joshua, he's helping us as a general manager. My husband, David, helps us with deliveries and maintenance things that come up and then our parents—John and Doralee Lynch—they're trying to be fully retired," said Taylor.
Small, family-owned businesses like Sydell make up nearly half of South Dakota’s businesses—more than any other state in the country. That’s according to a 2020 Census data analysis from OnDeck, an online small business lender.
The Conway Center for Family Business reports family-owned businesses contribute 64 percent of the country’s gross domestic product and 78 percent of new job creation. They’re also vital to the local communities they serve — especially in rural areas — bringing in tax revenue and donating to local charities.
Some support larger industries crucial to rural South Dakota. Like Floyd’s Trucks in Rapid City. They sell and service freight haulers and other trucks.
Now in its fourth generation of family ownership, they have nine locations in South Dakota, Nebraska, Wyoming, and Montana. Mark Gillam took it over from his father and grandfather. Later on, Gillam's two sons, Jon and Michael, joined him as partners.
Like Sydell, Floyd's current owners set off on a different career path, but eventually came back.
"I was a lawyer for four years and practiced at a law firm in Denver and worked for a judge down there and enjoyed that," said Jon Gillam. "But was also thinking, you know, this might not be headed where I want to go long-term. So I started talking to my brother. We had some of those late night talks over a beer."
Gillam added, "I think we all went rogue. You know, I mean, Floyd started it and everybody went rogue and then everybody kind of came back at one point or another."
This is where Prairie Family Business Association comes in. It’s an outreach center of USD’s Beacom School of Business. They help family businesses navigate challenges so they can thrive into the next generation.
Stephanie Larscheid is the Association’s Executive Director. She said selling a family business to a third party can be detrimental.
“A lot of times those businesses leave the small communities they were in," Larscheid said. "They’re footprint isn’t as big in the community. They’re not giving as much philanthropically. They’re perhaps employing less people when it’s not a family-owned operation. And there’s a lot that needs to be thought of before families go down that road. Some of the families who’ve made the conscious decision to remain in the family, that’s their motivators. Why would I sell this company that we’ve built and worked so hard for? Then what happens?
Of course, small businesses can live on through other ways than family.
Paul Huffman owned Lemmon Livestock for more than 40 years. When it came time to let it go, two longtime employees stepped in.
Rowdy Benson, one of the new owners, said community is exactly why he and Brady Ham took over the beloved sale barn.
“The community didn’t just want the sale barn to be open. They wanted local personable people owning and operating and managing it that they could relate to," Benson said. "And we’ve seen just a huge support from our community in the last five weeks of owning and operating the sale barn. I don’t know what would’ve happened to it – I can’t say – I just know what the community was actually wanting and hoping for. You know, it’s kind of out of necessity, we did this this for our community.”
The owners of Sydell felt the same when they came back and took over. But they have no plans to pressure their kids into succeeding them. Instead, they’re leaving their options open, but preparing for a few different scenarios. They credit Prairie Family Business Association with helping them do that.
Jon Gillam of Floyd’s trucks agrees. At two and four years old, his kids are still too young. He said getting help from an organization like Prairie Family helps them prepare for multiple options down the road.
“It sort of broadens your mind in that way that family business can continue and evolve in different ways. It doesn’t have to be locked in as one thing forever," Gillam said. "In fact, it probably shouldn’t or you know it would be difficult to just survive in this ever-changing world.”
South Dakota small business owners can find plenty of other resources to help grow and run their businesses.
From the state Small Business Administration to Startup Sioux Falls to the Secretary of State’s office—each has workshops or resources for business owners. Some even help with underserved populations, such as veteran, women, people of color, and rural business owners.