Business

5 Tips for Kids to Run the Family Business

Here are five ways business owners can inspire and empower their children to take over the family business.

Amelia Nielson-Stowell Sep 1, 2017

Family businesses are the backbone of the American economy. But their downfall comes when the next generation doesn’t want to take the reins. An alarming 43 percent of family businesses do not have a succession plan in place, and 12 percent of family businesses don’t make it to a third generation, according to a study by PricewaterhouseCoopers.

Company leaders who want their business legacy passed from generation to generation need to take steps now. Dave Brimley, co-owner of Brimley Neon in Salt Lake City, started helping at his grandfather’s neon sign store when he was 5 years old, sweeping floors and cleaning windows.

“I was always included in the family business, which made it fun,” Brimley says. “I loved going to the store with my dad and seeing the hot fire and glass. It’s very creative.”

Now 90 years old, the business remains family owned because the Brimleys are tight-knit, he adds. Brimley runs the business with his daughter Emily and her husband, Ryan Eastlyn. Today, his grandchildren are welcome in the shop, and they pick up a broom just like Brimley did as a child.

Here are five ways business owners can inspire and empower their children to take over the family business.

1. Draw Boundaries

Separating work and home can be difficult for a family business owner, but it’s critical to show the next generation that a personal life is maintainable outside of a career. Garrett Barnes, senior vice president and manager of Zions Bank’s Family Business Services, grew up in a family business. His parents owned a restaurant in California, and Barnes says, “I quickly learned I didn’t want anything to do with it because it dictated our lives.” Holidays and vacations were stressful because the family worried about how the manager was handling restaurant operations.

2. Administer With Values

A study by Harvard Business Review found that when the economy is strong, family run companies don’t earn as much money as companies with a diversified ownership. However, when the economy is suffering, family companies thrive. Family businesses, the study concluded, focus on resilience over performance.

“Those family values can hold up no matter what the economy or nation does,” Barnes says. “If my family bases business decisions on love, anything could happen — my business could downsize, my staff could leave — but it doesn’t change my foundation because it was built on love. If you build your foundation on profit, your business will shatter if anything bad happens.”

3. Maintain Respect

Disagreements among co-workers are normal and even important to growing a business. But disagreements between family co-workers can get messy. Establishing formal job descriptions, Barnes suggests, helps family business owners demonstrate to their kids that everyone has a different role that is respected.

4. Require Work Experience

Asking kids to cut their chops at another job site in the same industry provides endless benefits, Barnes says. Children will learn successful business strategies from the competition, then bring back those best practices. Children also return to the family business with their own resume experience, and co-workers won’t think the boss’s kid stepped into their title because of entitlement.

5. Ask for Input

Family company owners who want to inspire their children to take a leadership role should ask for their opinions on business matters, then take an interest in their answers. The next generation can offer a new perspective and cutting-edge ideas.
 

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