When you’re next watching a fireworks display spare a thought for those who put it together. It looks spectacular, but this is a tough business: it’s the opposite of the old Yorkshire saying, “where there’s muck there’s brass”.
The general rule is: “where there’s glamour, there’s no brass”, which is why they’re all family businesses. Investors run a mile.
Howard & Sons Pyrotechnics, a 90-year-old fourth generation family business, puts on about 600 shows a year and 65 on New Year's Eve alone and makes $7.5 million revenue. Producing fireworks is a complex, competitive business: you have to know about chemistry, physics, a myriad of safety rules and IT. So each one is a big effort and the margins are tight.
The Howards don't do Australia’s biggest display – the $700,000 Sydney New Year’s Eve show – that's handled by another family business, Foti Fireworks. Their biggest job is the Qatar National Day celebrations, $1.2 million, and they also put on the Melbourne New Year’s Eve ($400,000) plus all the other Australian cities. A wedding costs about $1200. The pricing on all these projects is sharp, the margin skinny.
And it’s dangerous: the founder of the business, Sydney Howard, lost a hand; so did his son Harry. In 2007 the Howard’s factory near Lithgow blew up, spectacularly of course, damaging houses for miles around. No one was injured, thankfully.
In 1987 home fireworks were banned across Australia, almost killing the business, although it ended up leading to more large-scale public displays. They won the 2010 Delhi Commonwealth Games closer, but that turned into a debacle of late payments and lost equipment.
But the worst thing that happened to the Howard family was all their own doing, and the most common disaster to befall all family businesses: family in-fighting.
The business was founded in 1922 by Sydney Howard, an engineer for BHP at the Newcastle steelworks, who had been watching all the sparks flying off the hot steel and had an “Aha!” moment. He started putting together fireworks displays at home from imported crackers, but there were too many fizzers and duds among them, so he started making his own (thus the missing hand).
His son Harry joined him and in March 1932 they won the contract for the spectacular opening of the Sydney Harbour Bridge, which set the business up.
Harry was an only child so the second generation succession was uncomplicated, but when Harry’s two sons, Les and Syd, joined the business in the 1960s, things got difficult.
The sons didn’t get on. Things went smoothly enough for a while with Harry, Les and Syd each owning a third of the business, and Howard & Sons grew to be Australia’s largest pyrotechnics firm by far.
But by the early 1980s Syd had to get out. Harry and Les bought his share and he set up Syd Howard Fireworks in competition with his father and brother.
Syd was a Howard, which meant he worked hard and understood fireworks, so the business went well while he was running it. But he lacked a succession plan, and when he wanted to retire in 2001 he tried to sell the business to his brother’s sons, Andrew and Christian, but they didn’t want it.
He ended up selling the business to the investors who had backed him, and they quickly showed why fireworks have to be done by family businesses. The company quickly went broke, and Howard & Sons, now run by Les’ two sons, picked up most of the customers for nothing.
Andrew and Christian Howard, 36 and 38 respectively, now own the business 50/50 and are determined not to repeat the mistakes of their father and uncle. They get on like a bridge on fire, as it were.
There’s no board of directors, just them. There are no written rules of engagement, just “respect for each other, clear and simple... We give each other the freedom to get on with each part of the business” (Andrew designs the displays and handles marketing; Christian looks after manufacturing, R&D and logistics). Their wives, Fiona and Kellie, also get on, which isn’t always the case in these situations, and so do their five young kids.
Will there be a fifth generation running the business? Says Andrew: “We were never pressured to go into the business, we just wanted to do it because it was such a fun environment, giving people pleasure. So we’re not going to pressure our own children.”
They are going to try to diversify though, first into dangerous goods transport, which they know a bit about.
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