It was the Great Depression. Unemployment was at 25%. Wages had fallen 42% and the GDP declined 30%. Many lost their livelihoods – including D.L. Townes, who had been running the printing division for St. Louis Pencil Company in Missouri. Fortunately an opportunity arose in Tennessee, so the Townes family relocated and during the tumultuous year of 1933, D.L. established Shelbyville Pencil Company (asi/86850).

Fast-forward 87 years to March 2020, and the economy had once again come to a grinding halt due to the COVID pandemic. D.L.’s grandson, current owner Dan Townes, was faced with the heart-wrenching task of laying off the majority of his employees. “It was ominously quiet,” recounts Townes. “No phones were ringing. Our monthly sales that April equaled a normal month’s one-day sales.”

Over the years, the family business had fended off deep-pocketed competitors and weathered many crises, including inflation in the ’70s and ’80s as well as the 2008 crash. But this was different. “I truly believed we were looking at the end of our company’s existence,” Townes says.

Shepenco’s management team in 1983, seated left to right: Dan Townes, George Townes, Gladys Townes Potts, Vic Dearen, Jane Townes; standing left to right: Pat Lamb, Pam Smith, Tommie Williams, Frankie Caldwell, Margaret Throneberry.

But survival was in the cards. Townes notes that he’s “operating very close to 2019 levels with respect to sales volume and order count” and was able to bring back a number of employees, many who’ve been with the firm for decades. No slouch in the brains department, Townes was able to turn the global crisis into a learning experience. “The positive that came from COVID was a chance to restart,” he says. “It taught us more about our business than we could ever have learned without it. It also proved that bad times don’t last, but great people do. When one is so fortunate to work with great people, and everybody is willing to listen, good things will happen. The last two years have been the most exciting, scary and happiest. Why? Because when your back is against the wall, and money is tighter than your pants after a two-week cruise, every day is game day finals. One bad decision, and it’s over. As trite as it sounds, failure is not an option.”

That winning mindset has been echoed throughout the decades of the Townes’ family business. D.L., along with his sons Paul and George (Dan’s father, who came on board after having served in WWII and continued to come to the office in his 90s), set the foundation. In 1993, Dan became the owner after he bought out his sister Jane. At one time or another, Dan’s five sons have all worked for the firm (his oldest, Daniel, is COO), representing the fourth generation of Towneses at Shepenco.

ASI Media's CJ Mittica talks with Dan Townes, owner of Shelbyville Pencil Company/Shepenco, the recipient of this year's Counselor Supplier Family Business of the Year Award.

As the name indicates, the company is based in Shelbyville, TN, nicknamed “Pencil City” by the governor in the 1950s due to its abundance of pencil manufacturers at the time. Today, the award-winning supplier still has a friendly working relationship with Musgrave, one of the remaining U.S. pencil manufacturers, but gets the bulk of its items from China. Townes explains that his company does all the printing and decorating in-house, as well as some assembly, adding that carpenter pencils are trending now due to the hot home-improvement market. His firm has also expanded to include pens.

“Nothing is more successful than a happy family. No one cites the quarterly numbers during a eulogy.” Dan Townes

Guy Dupuis, director of affiliate sales development at Top 40 distributor iPROMOTEu (asi/232119), has known Townes since the ’80s after they met at a seminar. “Early on, Dan recognized the value in raising the level of professionalism in the industry,” Dupuis says. “Following in the footsteps of his father, he doesn’t just sell stuff, but teaches distributors how to sell the value of his product line. One thing that will always remain the same with Dan and Shepenco is their dedication to our industry.”

Shepenco COO Daniel Townes and his dad, owner/President Dan Townes, in their rendition of Step Brothers.

Another long-time colleague, Mary Dobsch, owner of The Chest (asi/44830), says Townes is truly loyal to his business, family and friends. “One time I had a health emergency and Dan was at the hospital to check up on me,” she says. “He’s made many laugh. With all of that aside, Dan is an astute businessman, always looking for creativity and how to set Shepenco apart. I wouldn’t hesitate to call him for direction with my own company. To know Dan is to love him.”

Townes, ever witty but introspective, shares some tips for running a successful family business. “First, there are two things here, a family and a business,” he says. “Both are important, but nothing is more successful than a happy family. No one cites the quarterly numbers during a eulogy. Next, don’t get caught up in all the latest biz school buzzwords about processes. The tenets of a successful business have stayed the same, it’s just the processes that change. And the verbiage they’re called. You want success? Do what you say you’re going to do. Do it and do it well on your worst day, and great on the other days. And when it’s wrong, make it right. Pretty sure if one does this, they will do alright.”