With so many family-business transitions flopping, you might ask why anyone would want to invite their kids into one.
I recently spent a day discussing family businesses with a group of successful entrepreneurs. I asked the group a simple question: "Why would you want your kids to work in your business?"
My question triggered a furious debate that I realize now was more about parenting philosophy than company building. I've summarized the two camps below:
Family business believers
One of the entrepreneurs, Mark, had brought his 24-year-old son Zach into the business full-time to help with communications and marketing. Zach, being of the Twitter generation, understood how to leverage social media, which was a skill-set Mark's company lacked.
When I asked Mark why he wanted Zach to join his company, he gave me the pat answer outlining his son's unique skills. Mark had clearly answered this question in his own mind a number of times.
I know there are lots of unemployed Facebook-savvy twentysomethings, so I pushed for a deeper response by asking a different question: "Why would you let your son work in your company?"
Mark's response was much more revealing, and I think it drives to the heart of why fathers and mothers want their sons and daughters to work in their company: "I love my son dearly. As he gets older and more independent, I see less of him. By having him join our business, I get to see him every day. I want to spend the rest of my working life with my son; I want to help him become a businessman and watch him develop. I want to be there to watch as he discovers new things. He's one of my best friends. … Why wouldn't I want to spend every day with him?"
As a father, I understood Mark's point of view. I know just how powerful the desire to spend time with your kids can be.
Family business non-believers
Gordon Parker is an accountant with Parker Simone, based in Mississauga, Ont., who has seen the other side of family businesses: "The kids come into the business with a sense of entitlement, and in many ways they are insecure because they have never achieved anything on their own. Eventually, kids realize their parents have stolen the one thing their money cannot buy — their kids' self-esteem — and the children become twisted and resentful."
I asked Gordon what his advice was for parents considering passing their business on to their kids. His answer was emphatic:
"Don't. Sell your business, and if you still want to give your kids something, give them money in your estate to start a business. Not only will your kids be better adjusted, you won't sabotage your business. When outside managers see the kids of the owner getting involved in the business, they get de-motivated and often leave, figuring their career will stall as little Johnny leapfrogs ahead of them on the career ladder."
Whether or not to let your kids join the family business is a personal decision, and if I learned anything from the debate I witnessed, it is that the decision has more to do with parenting style than anything else.
Where do you stand?
Thursday: Are your kids ready to work in your business?
Special to the Globe and Mail
John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell . Throughout his career as an entrepreneur, Mr. Warrillow has started and exited four companies. Most recently he transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which he sold to The Corporate Executive Board in 2008. He is the author of Drilling for Gold and in 2008 was recognized by BtoB Magazine's "Who's Who" list as one of America's most influential business-to-business marketers.