When Starr Hutchings Perdue’s great-grandfather opened a funeral home in Macon, Georgia, in 1910, funerals were a reliable way to make a living for black Americans. The dead were also isolated.
Perdue, 69, says owning a business has allowed him independence and freedom: “I didn’t have to depend on anyone to make a living.” Her parents took over Hutchings Funeral Home and it was successful enough to send Perdue and his five siblings to college, she said.
Over the decades, the funeral industry, which Perdue now co-owns with his sister Sharon Hutchings, has become more competitive and expensive. Mr. Perdue is no longer offered the potential for economic upward mobility that was available to past generations of his family. “We’re watching our spending more closely and splurging only when we really need to,” Perdue says.
For the first time in generations, a wide range of small business owners in the United States are struggling to outperform their parents, said Dan Wadhwani, a professor of entrepreneurship at the University of Southern California’s Marshall School of Business. Some owners say family businesses like Purdue have been passed down through generations and literally have the receipts to prove it.
This change is important. Entrepreneurship is a classic vehicle of the American Dream, woven into the cultural fabric of this country over the past 250 years as a difficult but rewarding path to increasing socio-economic mobility. For many families, it worked. Most American cities and many towns have at least a few family-owned businesses that are over 100 years old. They survived times of war, economic depression, and massive social and cultural change, allowing their owners’ families to earn a living while preserving their parents’ heritage.
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As of 2021, more than a quarter of all U.S. businesses were family-owned businesses, according to data released by the Small Business Administration in April 2024. Many of them span multiple generations. Nearly one-third of active family-owned businesses pass “full or controlling ownership” to the next generation, according to a survey of 730 family business and office executives conducted in early 2025 by advocacy group Family Enterprise USA.
But now some Main Street-style business owners are striving for upward mobility in a way that previous generations never did. And while those who inherit successful companies and strive to evolve them may be able to own houses and cars and send their children to college, it is difficult for them to even rise to the position of parents.
“The American Dream is fragmented in a way.”
Part of the problem for some small business owners, they say, is that their company’s success doesn’t boost their personal finances as much as it used to.
M&S Schmalberg, a 110-year-old custom fabric flower company in New York City’s Garment District, is experiencing a boom period, said Adam Brand, vice president and fourth-generation co-owner. This business was born out of the classic American Dream story. Brand’s great uncles Morris and Sam Schmalberg immigrated from Poland and started a flower shop in 1916. This allowed Brando’s grandfather, Harold Brando, to build up enough housing, specifically Sam Schmalberg’s attic, to immigrate to the United States after surviving a World War II concentration camp.
Now, the flowers are appearing on the Met Gala red carpet and on TV shows like HBO’s “Sex and the City” and Netflix’s “Bridgerton.” Brand, 42, said the company has made “decent profits” for the third year in a row as a la carte flower sales have soared during the coronavirus pandemic. “If the business stayed like this forever, I’d be very happy,” he says.
But he says Brando’s home on Long Island is smaller than the one he grew up in, just a 15-minute drive away. He estimates that he earns at least as much as his father, but his income is no longer what it used to be. The same goes for business, says father Warren Brand. Rent at the M&S Schmalberg factory is about $15,000 a month, up from $420 a month in 1965, or about $4,500 in today’s dollars when adjusted for inflation.
It’s not just the brand. Wadhwani said not just family business owners, but small business owners of all types are struggling to keep up with rising costs. He cited inflationary pressures, economic uncertainty for a wide range of customers, and an array of oversaturated industries as reasons for this.
These barriers to entry can hinder business adoption and growth. Wadhwani said some business owners with access to generational wealth and Silicon Valley investments could still prosper, but other smaller companies and aspiring entrepreneurs with less financial resources could be weeded out. Without socio-economic mobility, “the American dream has kind of become fragmented,” he says.
The difficulties of modern upward mobility
Over the years, Rick Serrano’s family business has overcome the myriad challenges Wadhwani cited. Serrano’s Mexican Restaurant, an Arizona restaurant chain, was founded in 1919 as a dry goods store by his grandfather and great-uncle, immigrants fleeing the Mexican Revolution. It later became a department store, and after being “squeezed out” by chains like Macy’s and Dillard’s in the 1970s, it became a restaurant, Serrano said.
Each business owner expanded the family’s finances, allowing Serrano herself to live a better life than her parents. Serrano herself says: He feels that his family’s personal financial situation and lifestyle are similar to when he was a child. The restaurant chain now has two locations, down from its peak of eight in the late 1990s and early 2000s.
Although Arizona’s minimum wage increases (from $6.75 in 2007 to $15.50) have lagged the rate of inflation over the same period, Serrano said annual minimum wage increases have made it “very difficult to stay profitable.” According to the CNBC/SurveyMonkey Quarterly Money Survey released April 9, many people are cutting back on eating out and buying groceries to stick to their budgets, and more than half of Americans say they have felt less able to make ends meet in the past year.
“To be successful in today’s restaurant industry, you have to be super successful,” said Serrano, 65. “This atmosphere has taken us out of growth mode,” he added.
David Judson, the fifth-generation owner of Los Angeles-based Judson Studios, says he has a better life than his father.
Courtesy of David Judson
According to Opportunity Insights, a research and policy institute at Harvard University, achieving social and economic mobility is generally becoming more difficult. The institute found that 90 percent of U.S. children born in 1940 earned more than their parents in adulthood, compared with half of children today.
The half number remains an important number, and in fact, some modern family business owners have managed to outperform their parents. David Judson, the fifth-generation owner of Los Angeles-based stained glass studio Judson Studio, has expanded his family’s business into contemporary art (such as a glass portrait of Kobe Bryant) and public partnerships, such as a partnership with Seattle’s public transit system, he says. He points out that these projects are a far cry from the church windows and Frank Lloyd Wright homes that the company once generated revenue from.
He says he has evolved the company’s tax structure to save money and now prioritizes investments rather than worrying about expenses. “There was a time when my dad struggled to make ends meet,” said Judson, 57. “Instead of catching up, we’re now building.”
It helps that stained glass is niche, he added. “It’s unlikely that big companies will step in and take his business away.” “We’re never going to be a large financial company, but it’s very important to me that people feel like they’re in control of their own lives,” Judson says.
The cultural significance of American “hope”
Running your own business is a viable way to take control of your career and finances. But the less it helps people achieve social and economic mobility, Wadhwani says, the less legitimate the American Dream itself becomes.
“I think social mobility is always important to culture and society because people want to live longer than they are now,” he says. “What has been a huge part of American culture has been that hope, that feeling of ‘building a better future for yourself and your children’…That was one of the things that connected us culturally as Americans, because we felt like it was something we all shared.”
Of course, there is no need to constantly compare yourself to your parents or grandparents, especially if you are happy with what you have. Mr Brand, co-owner of M&S Schmalberg, said he was still a homeowner with a young family in one of the most expensive states in the country. The company’s goals, he says, are to preserve his family’s legacy, advance American manufacturing and find new ways to bring fabric flowers to the world.
William Pope Hutchings, founder Charles Henry Hutchings I, an unidentified man, and Charles Henry Hutchings II stand outside Hutchings Funeral Home in Macon, Georgia, shortly after it opened in 1910. Today’s businesses are less than a block away.
Courtesy of Star Hutchings Purdue
Perdue, co-owner of Hutchings Funeral Home, was willing to sacrifice the high pay and career stability of her previous job as a corporate accountant to return to the family business at age 40. Although the hours are “long” at 50 hours a week, she is able to take time off for holidays or to see her doctor without fear of how it will affect her career.
“When you think about working for someone else or working for yourself, you start to see the benefits of working for yourself and working in a family business,” Perdue says. “It’s much more flexible and you can invest in (its success).”
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