Passing the Torch: Keeping Business in the Family
For parents with a business mind and a heart for family values, passing your company along to your children can be one of the most gratifying moments in life. For kids wanting to inherit the family business and take it to the next level, this can also be a banner moment.
Our small business specializes in generators. Our client base doesn’t stretch us too thin and we focus solely on residential generators. Customer service is of the utmost importance to us, and we want to provide a personal, friendly feel. The most important factor for ensuring this is the case for running a family-oriented business. This might not be a luxury every small business owner or entrepreneur can afford.
This certainly won’t make the parent/child relationship any easier, but with my own success story, I might be able to offer unique insight.
Upbringing is Key
The desired result starts at the very beginning. Passing on the family business can only happen after the years you spend grooming your kids. Every parent knows the clear steps of successful development. First, we give them life. We protect, feed, nurture, teach, and, ultimately, send children on their way.
My three sons were raised in the same manner. We did our best to set a good example through our work ethic, values, and desire to excel. In addition, we gave our kids space to explore and emphasized the importance of education. From my perspective, this foundation sets up one of the keys in having a successful family business: Children should have options and only choose to be part of a family business because they want to.
Kids who feel an entrepreneurial push should ask their parents for opportunities to get involved in the family business. From ringing up customers at the register to helping catalog inventory, every single task helps children develop the skills that will make him or her successful in running a business. Establishing ownership over a process will instill those very same values that parents who are business owners have.
Rewards and Pitfalls
In my first career, I had many opportunities to observe firsthand the qualities of a good leader. I strove to apply those qualities to our family business – clarity of expectations, knowing when to get out of the way, providing constructive feedback, sharing experiences, expecting the best, and paying for performance. An overbearing environment, a lack of clarity, and poorly defined responsibilities or roles could lead to undesirable ends.
Many small business owners have their children take on supervisory roles within their companies. By exhibiting these traits early, parents give their kids a chance to learn the proper way to become leaders, resulting in young supervisors who are respected – not viewed as favorites by other staff members. This is vital for owners’ children who want to become an integral part of the family business.
Chemistry: No Test Tubes Required
Each business owner needs to decide what’s best for the business – and the family dynamic. The proper chemistry needs to exist within the family. In our case, one son had just finished a business degree at the University of Georgia. Our generator company was young, and I had proven that the business model worked. I made it clear that, if at any time, he saw a better opportunity, he could move on and there would be no hard feelings.
For us, the pre-established knowledge of processes and procedures, developed internally, was the driving factor in pursuing a family business. Some of these processes I consider to be trade secrets. We invested a lot in furthering our education, and our customer list is a very important asset. By treating our company like a cooperative effort, we’ve been able to develop a united mindset, strengthening our bond and our company.
One of the great joys of a family business is being able to see the growth and development of your child firsthand – or to see how successfully your parents have managed to establish a business and incorporate you within it. Accurately assess your company’s needs and see whether taking the family route is a good investment for you. You will get out of the process what you put into it. You may ultimately have a stronger business and a stronger family unit.