To Be Or Not To Be

The quintessential questions to ask when considering the next generation entering the family business

Kenneth Gilbert consultant and partner, Business Consulting Resources Inc., Honolulu, Hawaii

Family businesses present the inevi-table question to the first generation and those that succeed the founders: Do I go into the family business or not? It’s a difficult and confusing situation for the kids, especially given the inevitable pressure from the founding fathers and mothers of the business.

Opportunities to work in the family business tend to be plentiful, but along with the opportunities must come the passion to work in the business, and that is often the most difficult to determine. Questions that typically come up include whether to go to college or just get into the family business, and, if college is the chosen path, what should the course of study be?

The first question that must be answered is whether the potential successor really wants to work in the family business. This can be a difficult question, because it can’t be answered by mom, dad, grandma or grandpa, all of whom have wonderful reasons for the would-be successor to take the giant leap into the business. Generation two and those that follow must dig deep to determine whether they really do have the passion it takes to go the long haul. Would-be successors must think about whether they can see themselves working in the business for their entire careers. If that path is the road the would-be successor eagerly wants to travel, then go to college and work in the business while getting your degree. The best way to do that is to plan with the business’ senior leaders before heading off to college.

Ask what the entry job in the business would be, how you would work your way up to your ultimate position, even what that ultimate position would be. Don’t make any assumptions! This conversation is intended to give you a very clear career path and will help determine college course work. In this discussion, you also want to talk about things like compensation, stock ownership — how much you can own and when and how you will own it, and benefits. Put it all in writing for your parents and the senior leaders.

While you are in school, spend every school break working in the business. This gives the other employees a chance to see that you are serious about the company and willing to learn the business. While at work, set up family business meetings to go over the business, its performance, its strategic plans and other long-term goals.

While you are at school, stay in touch with how the business is doing. Get regular updates from your parents and the senior staff by phone or email; ask about financial performance, employee issues, product marketing strategies and other key business performance measures.

While you are in school, work part time for a different company, in a position the family business could use and similar to the entry position that you will take after college. This sends a clear message to your family that you are serious about getting business experience!

If a potential successor is truly serious about entering the family business and makes these things happen during his/her college years, he/she will be prepared to enter the family business full time upon graduation. Founders and senior leaders of the business will clearly be able to assess the potential successor’s capabilities as time goes by, which will give them confidence in the successor’s business acumen and potential to be successful. If there are other children who want to come into the business later, the family will have set up a “program” for them to get their college education while they prepare to join the family business.

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