A family business can be a psychological minefield if you’re not careful. Pursue your dreams and see more of the world, or take responsibility here and now? Friends from university are currently falling into the same trap – parents often work hard at their business purely to provide for their children; is it time to give something back?
The questions can, and do, keep you up at night. But a simple list of the pros and cons might help you make a decision.
Firstly, whatever the family business is, it’s probably going to be something you know at least a little about. If you have a natural interest in it already, that in itself might be a huge pro- for example, if you love cars, and your family has been repairing cars as long as you remember, taking over the business might seem a very attractive proposition. Glenn Walton of Brisbane Tree Experts joined his father’s company as soon as he was old enough to do so – “tree expertise runs in [my] blood” is what he says – and has gone on to great success.
Even if the family business isn’t in a field you’re interested in, just the idea of taking over a business that is already developed sounds like a good plan to secure your future – and the future of any family members soon to come, as well. With so many young people finding it harder and harder to secure a permanent job, the idea of there being one just waiting for you to take it can seem like a life-changer.
There is of course the option to go and “see more of the world” before jumping into the family business – a gap year, volunteering – and this is the option taken by many. It brings a person “into the fold” with renewed motivation and maybe new abilities to help them on the job – if the money is there for it, it can work out wonderfully.
Lastly it can bring a family closer together as a unit, if their workdays are spent working towards common goals. No need to separate family time and business time: it’s possible, with care, to have them both. You’re unlikely to ever need team-building exercises, as well – you’ve already been one for a long, long time.
The data shows, unfortunately, that 70% of family-owned businesses collapse before the second generation even get a chance to take over. This can often be attributed to poor planning – not training new family members properly or hard enough for their new role, for example. Often the second generation sees a place in a family business as an easy option, when it’s not. Expectations vs reality can be a huge problem, especially since people may feel like they’re ‘stuck’ within the company, unable to pursue a different career should they want to. If a successor wants to form their own company, has the skills and motivation to do so, but is trapped by a sense of responsibility to the family firm – most people would agree that that person is being held back. And yet, a person’s loyalty to the family and business that they’re already involved in may win out.
Other cons are trickier and revolve around the family as a functioning unit. Divisions within the family can be impounded by joining the business, or not joining it. A child may feel hounded; a parent may feel underappreciated. Both parent and child may feel like the other is being ungrateful. This is a problem not easily solved, and often it is best to talk it through with outside observers.
This is never a decision that should be made lightly. Things should be weighed up from both aspects – “how will this affect the business” and “how will this affect the family”. Potential problems should be talked over both by the people affected and to independent observers, to make sure anything overly problematic is squashed before it affects finances, family, or both.
According to Forbes, students with a family business background should enter the biz only if they truly want it. Remember that a business is only as strong as its weakest link, and weakest links need to be made stronger – if a person doesn’t want to be there, let them know they’re free to leave the chain. Freedom, in fact, seems to be the main issue surrounding the debate – giving your children as much freedom as possible in both making the decision and dealing with any consequences that arise from it would be the correct thing for a parent with a family business to do.
About the Author:
Don Broida is an economics student with the interest in entrepreneurship. He loves all things Australian, great wines above all. He would love to see bottles of Australian Shiraz stock shelves worldwide.