As many of you know, I am fortunate enough to teach at Northern Arizona University. One of my courses is Management 300i where we teach students the basics for starting a business. They learn about writing a business plan, understanding the market, finding funding, staffing and the importance of business communication.
We have actually had several students start businesses as a result of this class. At a minimum, I get to know the students really well. As a result, students will come to me to ask questions about doing a start-up. I even get students who come to me to ask questions on behalf of their parents who have family businesses. One of these simple conversations turned into a trip to California this month to visit with a student and his family’s business. To keep him out of trouble, I will call him “Gary.”
A Real Rock-Star Student Who Thinks Like an Entrepreneur
Gary was a star student from day one. He was the student who always stayed after class to dig deeper into my lecture and asked questions that would hopefully allow him to avoid the mistakes I made. Not only did he ask me questions that he thought would benefit his parents and their business, but he had come up with a wonderful idea for a product that would help education in every single K-12 school. And his solution was less expensive than anything currently in use.
Hopefully you can picture Gary in your head: smart, hard-working and wanting to make the world a better place. He never asked for the grades to be curved, or extra credit because he attends every class. He is a student of life and soaks up everything like a sponge. More on Gary and my visit later.
Do You Work for the Family Business or Prove Yourself on Your Own?
I get this question all the time: “Should your children be brought into the family business after school or should they work outside the business first to experience success (or failure) on their own?”
I have seen it work well both ways, and I’ve seen it fail. But I personally suggest always having the children work outside the family business for three to five years. This is tough to do because it is the family business and you want to help your children succeed and there is of course the pride associated with having your children take over the business you started.
Are You Being Selfish; Are You Being Totally Honest?
What ever you decide, ask yourself if you are being selfish and if you are being completely honest. First the selfish part:
You started your business because you are passionate about it. Your business has become so much of your identity that you have probably even named the company after yourself. Do you remember the day you decided to quit working for someone else and start your own business? Are you being selfish to not allow your daughter or son to experience that same thing? Do your children have the same passion for the business as you?
Even if the answers to those questions are “yes,” think about how they will be treated by the other employees. Regardless of how hard they work and the successes they have in the organization, they will always carry the added burden of being the owner’s kid. I applaud any parent who really needs the child to return to the business to help, but instead takes the unselfish act of “forcing” them to work outside the organization to experience success and failure on their own before returning to the business.
Now let me get back to Gary and the honesty part. Gary wanted to go out on his own to develop his education product. His parents wanted him to return to the family business as soon as he graduated in 2015. He did as they asked and was quickly put into a senior position. Gary and I stayed in touch for the past year and he told me about his plans to expand and grow the business 800 percent by the year 2020. Keep in mind the business has been around for more than 20 years and has essentially been flat for the past 10.
During my visit with Gary, he expressed some of his frustration with his parents and the hurdles he was having trying to grow the business. By the way, this business is amazing and Gary could indeed grow it if given the reins.
After spending several hours with Gary, meeting the employees and walking all around the company, we sat down and I asked Gary if he really thought his parents wanted to grow the business. More importantly, had he actually asked them if they wanted it to grow and if so, why?
I know one thing for sure: Gary will be wildly successful. He will change the world someday. Will he do it at his family business? Time will tell. But my advice to every family business is that you not be selfish and that you always be honest with your children. It is what you would have wanted from your parents and it is the right thing to do for your children and your business. FBN
By T Paul Thomas