Risks, core values key to business longevity

March 11-- Mar. 11--Businesses more than 100 years old have seen wars, natural disasters, two recessions, and economic peaks and pitfalls, but they're still standing and continue to thrive. For those businesses in Frederick County, sticking to the company's core values and taking risks are the recipe for longevity.

For different companies those values may differ, but staying true to the business's foundation seems to be the underlying theme to sustainability.

Frederick Mutual Insurance Co. was founded in 1843 as Mutual Insurance Company of Frederick County by George Engelbrecht. His brother, Jacob Engelbrecht, wrote The Diary of Jacob Engelbrecht in which he chronicled the almost day-to-day happenings of Frederick from 1819 to 1878.

"Hamburg, Germany, burned down back in the early 1800s," said Nancy Newmister, president and CEO of Frederick Mutual. "You have all of these people here that are from Germany and they see their homeland burning and they're thinking, 'we got to do something about that.' There's no local insurance company, so George Engelbrecht put together a vision and started an insurance company. What I saw was they were insuring the things of the day. People had houses, people had hay farms, people had taverns, and this company insured that."

In 1843 an insurance policy was $100 a year, the equivalent of $3,300 today.

"Back then it was a percentage of the value," she added. "So imagine today, if you had to pay 10 percent of the value of your building as an insurance premium."

Fortunately, rates have changed dramatically over the last 175 years, but the company has remained the same in many ways.

Newmister, who has been with Frederick Mutual for 2 1/2 years, said the company has "strong foundational pieces to it," which is part of what attracted her to come aboard.

Frederick Mutual is the ninth oldest insurance company in the country and the third oldest in the state. In Newmister's role, she's put an effort into perpetuating the foundation and sticking to its roots, which includes writing good risks.

"All insurance companies want to grow profitably," she said. "With insurance, you've got to learn how to predict and forecasts and figure out what possibly could happen. It's the prudent, solid investment strategy."

For Frederick Brick Works Inc., founded in 1891, the core mission has evolved with the company. The business was founded by a group of stockholders, which was transferred to different family members as time progressed, according to Jeff Cregger, general manager of Frederick Brick Works. The majority of the stockholders today are descendants of the original group of owners.

The original location of the business was 184 E. South St. A new location was built on Monocacy Boulevard right before the housing market collapsed in 2008.

"We built this building in 2007," Cregger said, who has been with the company for 22 years. "It definitely made us tighten our belt and trim as many expenses as we could. We've always operated with minimal expenses, but it made us tighten up a little bit more."

The company originally manufactured brick, but now outsources all manufacturing and acts as a distributor.

"Over the years the amount of sales that we generate from brick sales has diminished," he said. "We've shifted our attention more towards hardscaping, manufactured stone, natural stone. Our product range has broadened to include a lot more items other than just brick."

But even with an increase in products available to consumers, he said the business is a "direct reflection" of the economy.

"As the economy goes down, homebuilding goes down, so therefore our business goes down as well," he said.

Frederick Brick Works is 128 years old this year, and Cregger credits that to being able to adapt to the changes and not being afraid to take chances on something new.

"Twenty years ago when manufactured stone came onto the market, everybody was leery of it," he said. "We took a chance, and it's one of our biggest-selling products."

Another key to longevity for the company is maintaining the feeling of family.

"The biggest thing that I've tried to continue is we try to run the business like a family," he said.

"Everybody knows everybody's name, everybody knows the wives and husbands and the kids. We try to do as much as we can to make people feel like this is a family business and not owned by stockholders and ran by a board of directors.

"And sustainability goes along with longevity of employees," he added. "We have 27 full-time employees. Ten of them have been here 20 years or more and over half the company has been here at least 15 years."

And whether a business has changed dramatically as time progressed or stayed true to its core, the touches of old and new have laid the groundwork for their futures.

Both Newmister and Cregger said it's important to have your ear to the ground to know what's coming down the line in their respective industries. But even if they know what's next for their industries, it's all about making good decisions, not quick ones.

Rick Weldon, president of the Frederick County Chamber of Commerce which also has 100 years under its belt, said a business' sustainability comes down to understanding the risks, how to manage the risks and how to build a system around it.

"And that's the key to those 100-year-old businesses," he said. "They've nailed that down."

For Helen Propheter, director of Frederick County Office of Economic Development, businesses that take predictable risks, she believes, have the highest chance of sustainability.

"The ones who have lasted had to be cutting-edge," she said. "And to be cutting-edge, you have to be out there before anyone else is out there taking a big risk."

And when to take those risks is also important, Newmister explained.

"It really helps a company sustain the bad years and the good years,"she said. "And then grow when they're ready to grow."

Follow CJ Fairfield on Twitter: @FairfieldCj.

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