Old Companies Survive By Being Financially Conservative

Frugal, lean, little (or no) debt - all of these terms describe a majority of the businesses that have "lived" for over 100 years.  They survive by saving up money during good years to help weather the lean ones and also to fund new opportunities when they arise without depending on external sources of financing. They finance new initiatives internally whenever possible, even if this means slower growth. Managers in these old companies tend to see themselves as stewards or custodians of the business and feel an obligation to manage the firm in a way that ensures its survival into the future rather than making a name for themselves through bold, risky actions. (One CEO gleefully told the interviewer how he ignored the advice a Lehman Bros. consultant had once given him about leveraging his business more.)

Though the old companies don't share similar cultures, there are some common behaviors that stem from this financial frugality. Many of these companies do not pay their employees high base salaries, but most of them share the wealth with employees in good years through bonuses or some other method of profit-sharing. Though they may not have the deep pockets of larger businesses in their area, these companies provide great support to local organizations such as the Little League, Rotary, Boys & Girls Club, etc. with time and donations.  Products and services offered by these firms tend not to be at the low end of the industry's price range, yet customers feel they receive good value. Suppliers seem to understand that the value of having a long-term customer is more important than getting the highest price. When they do need to go for outside financing, they don't usually have any trouble getting it (and at a favorable rate).  Perhaps their frugal tendency is also one of the reasons so many old companies engage in environmental sustainability efforts - they see these investments as a great way to save money in the long run.