Small Business

Should You Join the Family Business?


An heir to a successful family business grapples with an age-old dilemma. Our monthly family business columnist examines the pros and cons

Last month, I received several e-mails from readers questioning the merits of working outside the family business when a job is waiting for them inside it. Here is one reader's dilemma:

My parents own a proprietary distribution company that sells imported goods from China to well-known, high-end specialty retailers. They have worked together building the business for more than 35 years. Although they struggled during the early years, the past three years have been amazing. To say the least, my parents have achieved lifetime financial security. My uncle, my parents' brother-in-law, helped start the company and still works in the business as the vice-president. The company employs about 65 people.

I am a recent college graduate and am seeking employment. I've been on four or five interviews but so far I haven't landed the right job. I haven't been offered a career-type job to even consider. Part of my interview disappointment is probably a result of me not really knowing what I want to do. I have worked in our family business on and off during summer breaks and holidays since I was old enough to push a broom.

Now Dad wants me to join him in the business and take over some of his duties. I am confident that I can do the things that he wants me to, and besides, some of the other employees are encouraging me to come aboard. I am pretty excited about the possibility.

Do you think it is better for me to get a job outside of the family business or is it O.K. to join Mom and Dad? I'm not 100% sure that I want to work as an employee for my parents, but I need a job. And the interview process isn't a lot of fun.

Lance R.

This question is an ageless dilemma for heirs to a family business. First, let me state that there is no absolute right or wrong answer to your question.

Most consultants and academics will instruct you to go get a job on your own and work at it for a few years prior to joining your family business (see BusinessWeek.com, 3/23/05, "When the Kids Aren't Ready—or Able"). There is wisdom in this approach on a number of fronts.

First, going through the interview process is a beneficial learning experience. One day you might be required to interview and hire employees for your family firm. I think you will be better qualified and more sensitive, if you have gone through the process yourself.

Second, working outside the family business will build your business judgment and allow you to bring some new perspective and new ideas to your parents' company. Remember, your parents already know what they know and they will teach you what they know. This may be good, but it is not expanding the firm's intellectual capital. Working elsewhere will allow you to bring new, proven methods to tasks and goals from the outside firm to your family's business.

KNOWING TOO MUCH.

Third, at the very top of the list of problems in a family firm is ensuring management gives appropriate and helpful communication and feedback to developing heirs. This seems pretty simple, but in fact it is very complicated. In many cases, parents will ignore business protocol when reprimanding their child. This is bad enough, but it can, and does, get worse.

Sometimes parents will avoid having a "tough" conversation because they know some details of their child's personal struggles and don't want to add to the burden. If this potential problem develops into a pattern, the child will suffer from lack of appropriate feedback. The other side of the same issue is an overreaction on the parent's part for a relatively minor infraction. Either way, too much or too little does not help you develop.

Last, and possibly the most important point, working outside the business is a potential bright star for your self-esteem and confidence. Working elsewhere and receiving commendations and pay raises feels good. It also will make you stop and question whether you really want to join the family business. Having this real option is much better than knowing that you are joining the family business because you couldn't get a job elsewhere.

MAKING IT WORK.

Now you know some of the reasons for not joining the business. But if you do decide to sign on right away, be aware of a few things you can do to improve the experience:

1. Make sure that you have a real desire and passion for the business. Do you like what the company sells? Are you proud of the reputation? Do not join the family business just because your mother or father told you to.

2. Fill out a job application and go through the interview process. Starting work should be a deliberate step and not your father saying, "Come on in tomorrow and start."

3. Make sure your father or someone else in a senior management position gives you a list of your specific job responsibilities and the criteria by which your performance will be measured.

4. Start your career by reporting to someone other than a family member, if possible.

5. At all costs, avoid taking advantage of your family relationship as it may relate to pay and benefits. It may be hard for you to turn down money if your parents offer you a fat salary. But keep in mind you may be a leader one day—and if your employees see you coming to work in an entry-level position driving a bright red Ferrari—they will assuredly resent you from the start (see BusinessWeek.com, 8/29/06, "When Kids Play the Guilt Card").

Having said all this, I think it is important for you to know that I joined my family's business during college and stayed for almost 19 years. I resigned as the head of our operations with over 12,000 employees and operations throughout the U.S. and Europe. During my tenure, we grew at a compound annual growth rate of 26%. Other than mowing lawns, delivering newspapers, and teaching karate, I had no meaningful work experience prior to joining my family's firm.


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