First generation business owners are by their nature "can-do" people who focus like a laser on establishing and growing their company. Often they came up with a new idea for a product or service that beats the marketplace. They bootstrapped through the lean early years, and after much hard work and perseverance reach a level of success they are comfortable with.
By the time they’re in their middle-age years, business owners may have children of their own, perhaps already in high school or even college. But because they’re so involved in the day-to-day management of the company, they have never really asked the question: Do I want my business to become a family business?
It is possible they have just assumed their children will want to carry on the leadership of the company after they retire. Or the kids have expressed interest in other fields and endeavors, so they believe they don’t want to take over someday. Either assumption can be wrong, so the solution is: ask the question!
Have a purposeful and deliberate talk with your children at an early age – while they’re in college, or even still in their teens. You may be surprised how much thought your child has already given to an issue that has largely gone unspoken.
Talk about how they see their future, what they want to study, the things they want to accomplish. Ask the forthright question: Do you see yourself having a role with the company? Is it something they’d like to at least explore before they decide on another path?
If there is an interest, set up a specific strategy to give them a role in the business, prepare for the possibility of passing on the mantle of leadership someday. Give them a well-defined role with set duties and responsibilities, and see how they respond in the workplace. Set a defined timeline to get together and review their progress.
Ask them how they like the work. Tell them to give you an honest answer. One of the hardest questions a parent can ask a son or daughter is if they genuinely enjoy working in the same enterprise as Mom or Dad. Kids are naturally reluctant to tell their parents if their life’s work may appear as “boring” to the younger generation. Inquire as to their personal vision for their chosen vocation – what attributes are most important to them.
Taking over an enterprise should be the child’s personal choice, not an obligation they come to resent. So think about bringing in a trusted advisor to facilitate the discussion in analyzing the possibilities.
If after some time, the children do express a desire to eventually run the company, come up with a plan to guide them into a leadership role. Set a desired timeline for them moving up the chain and transitioning the levers of power. As problems or conflicts arrive, deal with them head-on through communication.
Look at this as a sequence of phases of additional responsibilities, well defined and understood up front.
One piece of advice: During the workday, try to treat each other as respected co-workers rather than parent and child. This will help them grow in their professional capacities by requiring them to meet the obligations you would expect of any other employee. It’s highly advisable for their direct supervisor to be someone other than yourself.
And their regard among other employees will swell as they realize the child is not being coddled as the “boss’ kid.” It will already be self-evident to your workforce since you probably share the same last name!
The opposite goes for nights and weekends: When you’re off the clock, be a family and enjoy your leisure time together. Leave the shop talk at work.
But first, start the conversation with your kids. I have personally seen the anguish that can occur when parent and child make erroneous assumptions about what the other wants. Such as a successful businessman with a daughter whom he thought wanted nothing to do with the company he built.
When he sold the business, he learned the hard way she had been waiting for him to approach her about joining him — while he made other plans because she hadn’t directly expressed an interest. As she so succinctly, sweetly stated, "But Dad, you never asked me!"
Whether your kids choose to follow in your footsteps or find their own path in life, talk to them early so you can each set the right direction for a successful and happy journey — not only for your business, but also for your family relationships.
Tom Sponsel is managing partner of Sponsel CPA Group.