Rob Everist: [00:00:00] Every family business has the same issues, and I’m gonna say there’s four of ’em. Number one, being profitable today. Number two, planning for the future. And then there’s the transfer of ownership, and then there’s the transfer of management. So if you put all those things together, I mean, that’s really it as far as if you’re going to try to run a family business, you know, all at the same time, or at least get it all put together.

Now everybody’s got slightly different flavors of those issues. The timing of it, the training, the mentoring, family dynamics, and personalities and egos. But they’re all different subsets of those four basic issues. Treat the business as a business and treat your family as a family, you know, and that’s kinda where it gets a little bit dicey sometimes to separate those two dynamics.

But you know, if you wanna run a business, there’s gotta be some tough decisions at some point about who’s doing what and how that’s being accomplished. When you’re in the business environment and you’re dealing with other people and other industries and other customers and vendors, it’s a business environment, which isn’t exactly the same and you’ve gotta be able to treat those all different. 

So get outside advice when you need it. An outside advisory board, legal and business consultants. I don’t have a ton of consultants, but at times you need to recognize when you need help to help sort out some of the family-type of issues.

So anyways get advice and find good advice.

Stephanie: Welcome to Family Business Connection, the podcast that uncovers the stories behind family business. Where leaders share how they navigate the unique challenges of working with loved ones while building a lasting legacy. I’m your host, Stephanie Larscheid of Prairie Family Business Association. In today’s episode, we talk with Rob Everist, CEO of L. G. Everist, a fifth generation company preparing to celebrate its 150th anniversary.

Headquartered in Sioux Falls, South Dakota, L. G. Everist has grown from its 19th century roots as a retail coal supplier into a diversified enterprise, producing aggregates, ready, mix, concrete, asphalt, and even operating its own short line railroad. Rob shares how his family’s values and structures, like a dynasty trust and next generation employment policy, have shaped the company’s longevity.

He opens up about the responsibilities that come with a longstanding family enterprise, the opportunities and challenges of bringing in new generations. And why family members must bring more than just a last name to the table. It’s a conversation about legacy, leadership and what it takes to carry a 150-year-old family business into the future.

Welcome to the episode, Rob. We are happy to have you here as our guest today. 

Rob Everist: It’s nice to be here. Thank you. 

Stephanie: To start off, give us some insights into your family business. What is L. G. Everist? 

Rob Everist: You know, L. G. Everist is primarily an aggregate producing company. That’s our primary focus at this point. But we also produce ReadyMix concrete, asphalt, we do some land development, construction work, dimension, stone, transload type of rail services in addition to running a short line railroad. So we’re a pretty diversified business across the upper Midwest and in the front range of Colorado. We’ve evolved quite a bit since our early beginnings.

It actually started, my grandfather started in Havana, Illinois back in 1876. He was a railroad agent and began figuring out how to buy coal wholesale and resell it and deliver it. L. G. Everist began as a retail coal supplier back in Illinois. 150 years, next year will be our hundred 50th anniversary.

And, across those years and generations, we’ve kinda migrated to a. Sioux City and to Colorado and for a stint in California. We’ve evolved quite a bit since those early beginnings. As of today, we’re primarily just an aggregate producing company, 

Stephanie: 150 years.

Pretty impressive. There’s not a lot of family businesses that can say they’ve achieved that status, so it’s certainly taken a lot of hard work and dedication from family members before you and family members beside you to get to this point. But I do wanna congratulate you and celebrate that fact, 150 years for L. G. Everist 

Rob Everist: Yep. We’re excited. It’s good, we’ll have some fun here next year, celebrating that. 

Stephanie: That’s great to hear. What are your first memories working for the business, Rob? 

Rob Everist: I grew up, I was born and raised in Sioux City and about age 14 my father took me to Hawarden, Iowa, which was one of our sand pits — still is — in Hawarden, Iowa.

And he drove me up there one day in June and dropped me off at somebody’s house. I worked at the pit there that summer. In the shop, weighing cars, testing material, doing whatever they asked me to do. And that was my first exposure to the sand and gravel business back in, that was in the late seventies.

Stephanie: Age 14. Your dad started you off strong and it’s great to hear that that operation is still going in Hawarden today. 

Rob Everist: Yeah, Hawarden is honestly one of our first locations that was started a long, long time ago and it’s in a different location than the original spot. But Hawarden, Iowa was one of our first producing pits on the map and still is today.

Stephanie: Oh, that’s great. Fun fact about L. G. Everist, you have a wholly owned subsidiary, the DNI railroad. So you have your own train! You’ve created great business opportunities through this subsidiary, and you’ve also used it to enhance your culture and to impact some philanthropic projects along the way. So tell us about the DNI railroad.

Rob Everist: So the DNI was born in the early ‘80s due to the demise of the old Milwaukee Road railroads that went bankrupt there in the late ‘70s, early ‘80s. And in an effort to save that railroad across all the different lines. Through the Midwest, the state of South Dakota bought some of the lines and we bought our line from Dell Rapids to Sioux Falls and got operating rights beyond, all the way to Sioux City.

It was a necessity back then because that helped us get our product to market. We didn’t plan on it, but that’s what we needed to do. You know, obviously back in the early ‘80s, we’ve grown it since then and we still haul a lot of our own material, but through the years we now haul cement and ethanol and other agricultural products and other things along the way, along the line between Sioux City and Sioux Falls.

And then we also interchange with the other big railroads in Sioux City. So it really does kind of open up our market of what we do and everything we do is kind of construction and aggregate related and railroading and getting from railroads to trucks — and getting to market and you’re dealing with a lot of the same people. It’s been a natural fit for us along the way. 

Stephanie: Yeah, it certainly makes sense. Interesting aspect of how you do business and some of the “why” behind the railroad. Thanks for sharing that story, Rob. I know that that’s a fun piece to talk about. So you’ve had several next gens enter your family business.

What does the process look like for a next gen to enter L. G. Everist? Do you have a family employment policy? 

Rob Everist: You know, it’s been an unwritten policy, but it’s, we’ve adhered to: going out and getting education and then going out and working somewhere else for five years and working, getting a promotion, getting experience, gaining confidence, make mistakes for five years that’s kind of been our rule of thumb.

 We’re putting a little more refinement to that policy and actually having it written down. It’s been kind of an unwritten rule, but everyone that has come into the business has adhered to that, you know, at the moment.

Yeah. I’ve got a nephew that’s working with us and a daughter and now I’ve got a son-in-law. So we believe in nepotism. We think that’s a good thing and we’re, we’re trying to promote that in the next gen and what family can do for a business. Everybody’s gotta realize that you gotta bring something to the table.

You just can’t show up with the right last name and think that’s gonna be enough. You gotta bring the energy and the passion and some talent, some new ideas. You know, you just have to bring something besides the name 

Stephanie: And that’s great. And I’m sure that was ingrained in you when you were a younger family business member entering the business as well.

I know you had a stint in the Naval Academy. Thank you for your service, Rob. As did your daughter. And so you’ve lived that. You’ve lived the let’s get outside experience, let’s prove ourselves elsewhere before we come back to impact the family business. 

Rob Everist: Yeah, and it’s, you gotta come back, I said, to gain confidence, you know. When you come back it is a double-edged sword and a family business, it can be treacherous, you know, most people wanna see you succeed, but there are others that kinda wanna see you slip on a banana peel and they’ll watch it.

And that’s the thing is that anybody thinks that they’re not watching the family members every day, you’re fooling yourself. 

Stephanie: That’s a very true statement, and I’m sure that’s something that you hit home on with your family members as they enter in that there’s a shining light on you, and this is really important to the family and to the business and the future of the business and the success of it.

Well, you have a unique structure in how your business is held and your business is held within a dynasty trust. South Dakota, where L. G. Everist is headquartered, and where Prairie Family Business Association is headquartered, is one of the few states that permits a dynasty trust. So talk about that structure, why it works for your family.

Rob Everist: yeah, that’s a, that’s a great question. So yeah, we are in a dynasty trust. A couple of ’em actually. So about 30 years ago, we went down the path of gifting our stock into the trust, and South Dakota back in the late ‘90s, became really a leader in the country as far as trust laws and trust in perpetuity.

So you can get into a generation skipping, long-term irrevocable trust that don’t have a sunset on it. So for a long-term business, it does really make a lot of sense to put it into a dynasty trust. It doesn’t work for everybody. 

But my comment would be that every family business you have to transfer ownership at some point, and you can either gift it to your children ,or you can sell it to your employees as an ESOP, you could go out and sell it on the market to a public company or another private company, or you could liquidate it. Those are kind of your options on the table. In our mind, the dynasty trust was a good option, as in a good alternative, ’cause our intention is not to sell.

Our whole goal has always been just to perpetuate the business. So it’s a double-edged sword, but you can gift it out there. There’s some real tax advantages, there’s some good long-term benefit of how that looks, you know, downstream. And I guess the other thing, as another aside comment, I mean, for successful companies, you’re gonna create value and you’re gonna create equity.

And if you’re continuing to create value, then it becomes harder and harder for the next generation to buy that out. And at some point there’s gotta be a transfer. ’cause the government’s always gonna want their piece, their little slice of the pie of that. So in, in our mind, this was a good avenue to go down, to put it in the trust and put it away for future generations. It’s a different set of challenges, but the ownership transfer hurdle is not there to jump anymore.

Stephanie: You figure that out, which as you said is the business grows in value, this is a great mechanism to be able to figure out how you’re gonna transition that business and you can say, today the trust is now the owner of L. G. Everist, and that works for your family structure. 

I’m sure you get asked a lot of questions about why the structure is what you decided to do and how it benefits your family, and we appreciate you explaining that because there are some complexities, a lot of complexities when it comes to family business. This is just one scenario that’s worked for your family. 

Rob Everist: Well, so far we’ll see. Well hopefully we can find out in another 150 years if it worked. 

Stephanie: Yes, we will as we get to celebrate year 300 for L. G. Everist. 

When you talk about the ownership structure, and you described that very well, how it fits into the dynasty trust or the couple of dynasty trusts that you have, that doesn’t have anything to do with how you’re leading the business and the day-to-day structure.

And I know the board formation has been a good point for L. G. Everist, and you’ve welcomed outside board members as well as family members on your board. So there are a few different pieces that you’re certainly putting in place in terms of governance. 

Rob Everist: Yeah, yeah. Exactly. You have to do both.

We’re trying to address all those different issues at the same time, but the worry as far as how to transfer ownership is behind us.

Stephanie: Which is great. A good weight off your shoulders. L. G. Everist continues to grow, and that it’s been primarily through acquisitions and strategic growth. What excites you about the future for L. G. Everist?

Rob Everist: You know, Stephanie, I don’t want to get overly complicated. It’s the possibilities. Opportunities are out there every day. Challenges that are out there every day. In my mind, it’s strengthening our organization, both financially and personnel, to be able to take advantage of opportunities or withstand any challenges that we’ve got and to be ready for that.

I guess what, you know, what excites me is continuing to beat the odds of being a private family owned business and growing it for future generations. We’re gonna make mistakes, but at least they’ll be our mistakes, and we’ll figure out how to deal with them. 

Stephanie: The future is bright. And you’re putting in the hard work now to make sure that you’re stable down the road.

Rob Everist: Well, that’s what I’d like to think we’re doing. 

Stephanie: You sure are. Rob, what advice would you give to fellow family business owners and those leading their family business? 

Rob Everist: You know, every business, every family business has the same issues. And I’m gonna say there’s four of ’em. It’s number one, being profitable today.

Number two, planning for the future. And then there’s the transfer of ownership. And then there’s the transfer of management. So if you put all those things together, I mean, that’s really it as far as if you’re going to try to run a family business, those are four things that you’ve gotta figure out, you know, all at the same time or at least get it all put together.

And now everybody’s got slightly different flavors of those issues with the timing of it and the training, the mentoring. Maybe family dynamics and personalities and egos, but they’re all different subsets of those four basic issues. And I guess my advice would be: treat the business as a business and treat your family as a family, and that’s kinda where it gets a little bit dicey sometimes to separate those two dynamics.

But, you know, if you wanna run a business, there’s gotta be some tough decisions at some point about who’s doing what and how that’s being accomplished. Family and personal relationships are difficult to separate from the business world. I mean, you, there’s relationships in a family that are from birth, and you’ve got family members that you’ve known on a personal basis.

When you’re in the business environment and you’re dealing with other people and other industries and other customers and vendors, it’s a business environment which isn’t exactly the same and you’ve gotta be able to treat those all different and treat ’em separately. 

So get outside advice when you need it. An outside advisory board, legal and  business consultants. I don’t have a ton of consultants, but at times you need to recognize when you need help to help sort out some of the family type of issues. So anyways, get advice and find good advice and that’s where the Prairie Family really, really helps open some doors as far as other folks that are out there, you know, wanting to help businesses. 

And my other thing would be to trust your instincts about what you think is right and realizing that not one solution fits everybody. You gotta be flexible to a certain degree, but you also have to trust your instincts, what you think is gonna be right for the end of the day, for your business and ultimately for your family. 

Stephanie: Very well said, Rob, with a lot of passion behind it too, because you’ve witnessed it, you’ve experienced it, you’re living it. When you talk about Prairie Family Business, you and your family have been involved since we were founded 34 years ago, and that association has served you and your family really well and we appreciate that and I know you do too.

What would you tell other families about getting involved with a family business association like Prairie Family Business? 

Rob Everist: I would say you better pick up the phone and call Stephanie today. 

Stephanie: Well, thank you Rob. We’ll, take their phone call and we’ll help them. 

Rob Everist: No, I talk it up every chance I get that it is a good resource and the organization has really kind of blossomed here in the last few years since you’ve been back in charge.

So it’s a great organization that’s providing a great service to all the family members. 

Stephanie: Thank you, Rob. When you were talking about, you know, some of the insights into other families getting involved, I appreciated how you said there’s not one size that fits all and what the power of a third party facilitator can do for a family.

And so I hope the people listening really take that into account that there’s only so much you can do to solve yourself. And there is a lot of power in having somebody who’s not a family member asking the questions and leading everyone through what our next steps are and how we’re gonna accomplish our goals. When that third party’s in the room, you can get through a lot more than you can when it’s just family trying to facilitate themselves. 

Rob Everist: That is a true statement. 

Stephanie: This has been a great discussion and a lot of good insights. Rob. Is there anything else that you would like to add? 

Rob Everist: You know, I just I don’t think so.

So I said, I’m sure happy that we’ve been involved all these years and it’s a great organization not only to gain insight about what others are doing, but it’s also just a great networking group that you meet families and, and businesses that, that you wouldn’t normally come across or you wouldn’t normally get a chance to meet. Anyway, that’s a shameless plug for the Prairie Family Business, Stephanie. 

Stephanie: Well thank you. We appreciate it, Rob. We’ll take all the plugs that we can get. You know, we were serving 280 businesses and going strong on serving more. As we approach that 300 number, we know that families need that outlet in the resource and the community of other families who are working through governance and structure and ownership and management, just like you’ve described here today. And so that’s what we’re here for. 

Thanks so much for the great discussion, Rob, and for sharing your insights on family business and L. G. Everist experiences. We really appreciate it. 

Rob Everist: Alright, great. Have a great day.

Stephanie: That was Rob Everist of L. G. Everist. From its start as a coal supplier in the 1800s to becoming a diversified construction materials company today, L. G. Everist shows us what 150 years of family business looks like in action. Rob reminded us that lasting success comes from more than just a family name.

It takes structure like their dynasty trust. And it takes preparation: sending the next generation out to gain experience before coming back in. It takes passion and fresh ideas to keep a business thriving through generations. If Rob’s story inspired you to start thinking about your own leadership transition or succession plan, we invite you to explore our resources and community at fambus.org.

There you’ll find tools, events, and stories from other business leaders walking a similar journey. And follow us on social media for more stories from inspiring leaders like Rob.