After unwrapping gifts on Christmas Day 2005, Colleen Fanning got something else from her dad: an offer to run the small inn he bought in 2002.
Bill Fanning spent more than two years tearing down, rebuilding and expanding the Brick Street Inn, a fixture on Main Street in Zionsville. But it struggled financially after reopening in the fall of 2004, and his patience was at an end.
“He told me: ‘Either I’m going to sell the inn or you can take it over,'” recalled Colleen, 26. “My first thought was: No way. … I was concerned about balancing my professional life and family relationship,” she said.
It’s a common quandary for younger generations stepping into the family business.
Still, the idea grew on Colleen, who had helped with the design for the renovation before moving to Atlanta. By the time her dad made the offer, she had returned to Indianapolis and was working as a manager at the downtown Omni Severin Hotel.
But before Colleen joined Brick Street, she and her father hammered out a contract that clearly spelled out her authority: She would have day-to-day control but would consult him on projects that involved large amounts of money or could incur significant liability.
“We ensured that there would not be too many cooks in the kitchen,” she said.
Colleen took the reins in February 2006. A year and a half later, it has a firm business plan in place and is turning a profit.
That’s quite a feat, said Sotiris Avgoustis, chairman of IUPUI’s tourism department. Small inns are tough to run at a profit, he said, and owners often encounter problems when they have family members running them.
That’s because they don’t have enough rooms to make money on overnight rentals alone and must branch out into other businesses. And if the owners can’t hire professionals with a strong hospitality industry background, things usually don’t go well.
“Many times people get into these types of businesses because … it’s something they think will be a lot of fun,” he said. “But they often don’t have money to invest in technology and training and spend most of their time putting out fires.”
The opposite was true, though, for Brick Street. Colleen had experience in the hospitality industry, and she set out to professionalize the place. Her first moves were to cancel contracts and review spending at the 7,000-square-foot inn, which has eight guest rooms, a cafÃ©, gift shop and two meeting rooms.
In mid-2006, she hired Courtney Voelkel, a co-worker from her time at the Omni, to be general manager.
“We needed to run the inn more like a real business with budgets, goals, forecasts and standardized procedures,” Voelkel said. But Colleen and Voelkel, now 27, struggled to get the staff to take them seriously.
“We were not well-received,” Colleen said. “There was the perception that I was just the owner’s daughter with no experience.”
After an almost 100-percent replacement of the inn staff and a renewed focus on customer service, it is operating in the black. Colleen declined to disclose its annual revenue.
Catering and events and guest-room rentals vie for the top money-making spot, while the gift shop is run more as a guest amenity-rarely turning a profit.
Since hiring help, Colleen said she’s been able to focus more of her attention on word-of-mouth marketing by becoming active in the Zionsville Merchants Association and the Indianapolis Chamber of Commerce.
“We’ve made huge strides with more regular bookings and more name recognition,” she said.
And management’s short-term goals are clear. Colleen wants to see the guest rooms more consistently booked and expand the inn’s meeting business.
For some companies, the historic setting-along a strip of antique shops, boutiques and artists galleries in downtown Zionsville-is ideal.
“It’s big enough for our needs, but still quaint,” said Dave Buckland, delivery manager for Fusion Alliance Inc., an Indianapolis-based technology consulting firm that has held about a dozen meetings at the inn. “They’ve always met our needs.”
Brick Street’s management transition worked in this case because of the open dialogue the Fannings had, experts said. Indeed, communication is key.
“A lot of small businesses are owned and run by multiple family members and occasionally the children will take over the business,” said Victoria Hall, director of the Central Indiana Small Business Development Center. “Some of the most successful transitions that you’ll see is where the younger generation was involved early on and works at the business part-time with the owner.”