Q. My child (age 20) has no interest in joining the family business. What can I do?
A. Very sorry to hear that; unfortunately, your options at this stage in your child’s life are far more limited. Any motivation you might provide for them to join is likely to be extrinsic and therefore may not be enduring. I’m going to defer on this question and discuss when to start preparing successors.
By the time they are in their late teens, your children will have some very entrenched views about the family business, which will be gleaned from years of observing its impact on you and the family at large. What you think might be motivations to join (job security, being an ‘insider’ with respect to the family wealth) might actually translate as negatives for your child (workaholism, working under the scrutiny of judgmental family members). While there are financial benefits of having a family business, these may be offset by the lifestyle burden associated with being an owner-operator, or the constant talk about the business around the kitchen table.
What can make a big difference in their perception is the family business narrative within the family. Family businesses are about much more than just the financial. They have elements that other business do not have: they can embody the values of the family, and they can have socioemotional wealth – non-financial benefits such as the sense of identity, the family’s contribution to the economic and social benefit of community, and the power and influence that comes with all that.
Family businesses with more socioemotional wealth are more likely going to stay in the family from one generation to the next. Preparing successors starts with nurturing that from a very young age.
Consider This: What are the pros and cons of being part of your family business? How are these perceived differently across different generations of your family?
Further reading:
- Values Define A Family Business, But Who Defines The Values?
- Family Businesses Rarely Transfer to the Next Generation — Here’s Why It Matters
- Is family business the most valuable family asset?
- What is the impact of the family business on the family office?
- Planting the seeds of success: Creating an enduring legacy
- Why would anyone go into the family business?
- Beyond profits, family businesses can create ‘socioemotional wealth’
- How many SMEs will pass on leadership to the next generation?
- Wealth Management & Estate Planning: What happens when there’s no one to take over the family business?
- Why mainland Chinese children are starting to turn their backs on the family business
Here is more on reading on family business succession planning.
