It happens all the time. And not just in Hallmark movies.
The son or the daughter pooh-poohs their family business and moves away from the heartland to pursue their fortune in New York or Chicago. Then – penniless and more than a little hungover – they return to their home town, hat in hand.
“Actually,” they say, “ever since I was a child, I’ve always dreamed of owning a company that manufactures electronic components for the automotive aftermarket industry. And now my dream can be realized.”
I’m not knocking it. Young people should have their fun. Boring old Mom and Dad can run their boring old unsexy business in their boring old unsexy little Nebraska town while that happens. It’ll all be there when the inevitable reality sinks in – the reality that it’s a cold, hard world out there and spending one’s life working for someone else isn’t all that it’s cracked up to be.
And, if you’re going to spend 12 hours a day at a job, does it have to be preparing spreadsheets, editing press releases or revising HR policies for a big company? Why not build value for your family?
Most small-business owners are over the age of 50, according to theSmall Business Administration. Even theWall Street Journalreports that “a growing number of young adults are joining the family business due to a cooling labor market and a sense of urgency among older business owners to make succession plans”. Why not be that successor?
You can. But know this: if you’re planning on leaving your corporate job to join Mom and Dad, at least understand the real reason why. Because it’s not going to be so easy.
For starters, you have a business to learn. You will need to establish trust with people – employees, customers, suppliers – who only know your parents. You will face a serious credibility gap because you will have little credibility. You will probably face accusations of nepotism. There could be a potential conflict with the children of other partners or with managers who have been in the business for a much longer time. Then there are Mom and Dad sticking their nose in and refusing to retire in peace.
There will also be problems unlike any problems you saw while at your corporate job. You will battle every day with customers who don’t pay, employees who don’t show up to work and people who lie, cheat and steal to keep their money out of your bank account and renege on the promises they made. Business owners deal with countless problems and risks that a paycheck-receiving employee never does.
Also, know that your parents will have their concerns. You’re probably not the white knight that you think you are. For all you know, your parents don’t really need you. They’re struggling to control their overhead and may not be thrilled at the added expense of bringing you on. They’re worried about what other family members will think. They’re worried that you’ll have tantrums like you did when you were eight.
They’ve worked hard to build something of value and you haven’t been part of those plans. They have their set ways of doing things – ways that have worked for decades and will continue to work – and are not in a mind to have to argue with you about them. More importantly, they may have other, more lucrative succession plans that don’t involve their children, like selling to that private-equity firm that’s been nosing around, or to their employees or to that competitor who keeps making offers every year at the annual trade show.
But a return to the family business can work as long as you, the returning child, know what you’re bringing – and what you’re giving up.
You’re hopefully bringing some form of expertise learned in the corporate world that could make your parents’ company better. Maybe it’s marketing or branding or financial management or even just upgrading from that 1985 version of QuickBooks to something that will not only increase productivity but give the perception that the company is progressing in a forward direction. You could also be bringing the vision of a new future, new ideas, new products and comfort for both employees and customers so your parents’ company will not only continue to exist but grow. You’re hopefully giving your parents peace of mind and financial stability.
What you’re probably giving up is money. Lots of it. I know too many corporate employees in mid-level positions who make multiple times more than my typical client running a family-owned business. You’re also giving up the prestige of saying you work for a big corporate brand. You’re giving up the perks like generous healthcare plans, 100% matching retirement contributions, trips to Hawaii for that internal sales meeting and dinners at Ruth’s Chris paid for by the company’s card.
But in return, you may be able to get the one thing that everyone desires: more control over your life. Running a business doesn’t provide complete control. But the smart clients I know frequently take advantage of being the boss by exercising a little more control over their lives as opposed to working for a boss. That’s the real value of being a business owner. And it’s something a corporate job, despite its perks, will always lack.