As a child, you probably spent a lot of time hanging around the family business. “When you’re done with school, you have a job waiting for you. Come and work for the family,” your Dad said.
Yes, it’s a great feeling to be assured that you have guaranteed employment after getting your college degree. Likewise, your career path has been set in stone.
At this time of the “Great Resignation” where millions of Americans are refusing to go back to work after pandemic restrictions were lifted, working in a family business seems more like a blessing than an option.
You have benefits that other 9-to-5, brick and mortar employees don’t have such as having the choice of working from home, more flexible work hours, and better job security.
Still, should you take your Dad’s offer and work for the family business?
What Is A Family Business?
A family business is an enterprise where a family member is the majority stockholder of the corporation. While the popular notion is that the father or the mother is the head of the family business, there are companies where the siblings or at least one of them is the majority stockholder.
Also, family businesses aren’t entirely run by members of the family. They might hold the key decision-making positions, but it’s not uncommon for the business to hire a third-party or outsider as a top-level executive such as CEO or CFO.
Pros And Cons Of Working In The Family Business
The model for a family business goes beyond the traditional Mom ‘n’ Pop store. Walmart, Ford Motor Corporation, Chick-Fil-A, BMW, Comcast, and Dell are just a few of the family businesses that have grown into highly-successful big corporations.
And that’s the allure of working for the family. Since the business is kept within the family, if the venture succeeds, everyone benefits financially. In contrast, if you’re an employee, your efforts result in a monthly salary but the employer will reap the full benefits of your productivity.
That thought often burns into the mind of an employee whose family owns a business. Over time, frustration stemming from the employer’s absence of a career path and succession planning program makes the option of working for the family business seem like the logical course of action to take.
But is it?
Will working for the family business change things for better or for worse?
Here are the pros and cons of working for the family business.
There’s more to working for the family business than having your own parking space, hearing employees greet you as “Sir” or “Ma’am”, a corner office with a nice view, and a private bathroom.
1. Availability of a Job
It won’t matter if there are openings or none. The company will create a position for you if necessary.
Assuming the business isn’t doing very well and can’t pay you a decent salary, chances are the decision-makers will accommodate your request for part-time work. The only assurance they want is that you’re on board the enterprise.
2. Higher Chances of Promotion
In order to be promoted as an employee, you have to put in more years in the position, remain consistent in achieving career milestones, and acquire high-level credentials.
For some family-owned businesses, a college degree plus a few years of experience working for another employer and the company are enough reasons to promote you to a higher position.
Definitely, the road to a successful career is paved smoother if you work for the family.
3. Better Prospects of Job Stability
If the family business has been operating for a long time, you can be assured of job stability. Even if things take a turn for the worse – such as during the pandemic – the company won’t let go of you.
In times of economic crisis, the family tends to come together closer to make sure their interests remain protected.
4. Familiarity With the Business
Sure, your Operations Manager has an MBA and has been effective in performing his functions. But you grew up in the business.
You know all of the employees by their first names, have spent time working in all the key areas of responsibility, the suppliers have seen you grow up, and most importantly, you live and breathe the organizational culture.
Best of all is that the family will trust you more than the outsider even if he has more impressive credentials.
These are the intangible qualities that will put you on top of the CEO list, not an MBA or a Ph.D., awards and accolades, or impressive tenure with a competitor.
5. You Know Who You’re Working With
You grew up with your family and have been through the best and worst times. You know how each one deals with problems and handles situations. Likewise, you can anticipate changes in behaviors and identify the thought processes of decision-making.
When you know who you’re working with from the day you were born, it should be easier to resolve conflicts and arrive at timely decisions.
6. More Relaxed Environment
In a way, the office is just an extension of the family home. Everyone has their own room and set of duties and responsibilities to perform. A day in the office is like stepping out of your residence and entering your workplace.
You spend break times with some family members as you would at home. And when the day’s done, you get to spend quality time with the family at a restaurant, a coffee shop, maybe shop, get a workout, or grab a matinee at the nearby cinema.
7. Tighter Collaborative Effort
Because the company’s profitability benefits the family, everyone wants the business to succeed. Opinions might differ but the purpose is the same – to resolve issues and address problems so that the business can continue to grow and move forward.
Family members are more willing to compromise their positions for the greater good of the business because they have a lot at stake.
That disagreement you had with your brother at the breakfast table? Apparently, it wasn’t settled and has now been carried over to the Board of Directors’ table. When you’re working for the family business, that fine line between professional and personal courtesy can get crossed over quite a bit.
1. Higher Incidence of Conflicts
As the saying goes, “familiarity breeds contempt”. The problem with working with people you’ve known all your life is that you develop biases against them. The biases are a result of a previous history of conflicts that may have been resolved but not forgotten.
A small incident, a comment, a slight innuendo. It doesn’t take much to trigger these biases and before you know it, something inconsequential has erupted into a full-blown conflict.
2. Questions About the Hierarchy
A father who heads the family business won’t hesitate to appoint the youngest sibling as the CEO of the company because he’s proven to be more accomplished in the industry and has acquired a higher level of education than the eldest sibling.
Similarly, a father might decide to adopt the family hierarchy into the organization to ensure consistency even if the youngest child is more accomplished than his eldest sibling.
In both cases, the hierarchy will be questioned and neither sibling would be comfortable working for the other.
3. Difficulties in Imposing Penalties
Jeannie Buss who took over the Los Angeles Lakers from her dad, Dr. Jerry Buss, fired her brother Jim because of conflicts over decisions that were made.
Jeannie said that she should have fired Jim earlier but waited too long because it was hard for her to terminate her own brother. According to Jeannie, had she fired Jim earlier, the Lakers would have been more successful during the prime of Kobe Bryant.
It’s hard to impose penalties on a family member because of the emotional ties. You can’t pull the trigger because you’re thinking not just about the company but its effects on the family as a whole.
4. Risk of Greater Tension With Non-Family Members
You might have been in this situation before.
You’ve put in all the time and effort, closed the biggest deals, landed the most lucrative accounts, acquired high-level credentials, and basically checked all of the boxes for a promotion.
But the President of the company decides to give the promotion to his son who’s fresh out of college.
The frustration you feel is the same thing your non-family employees feel when they get bypassed for promotion over less qualified family members.
5. Miscommunication With Third-Parties
It happens more often than you think in a family business. One of the siblings decides to operate beyond his scope of work and encroach upon the area of responsibility of his sibling.
He takes it upon himself to negotiate with suppliers and does so without informing his sibling. When the sibling finally gets to meet with the supplier, he’s informed that the terms and conditions of the arrangement were already finalized.
Although the intent might have been good, crossing boundaries leads to miscommunication with third parties and is never good for the business or the family.
6. Risk of Permanently Ruining Relationships
Sons suing their fathers. Fathers putting restraining orders on their children. Lawyers from either side spoke on behalf of the siblings.
As we mentioned earlier, the line between professional and personal courtesy is crossed so many times that when business is bad, relationships end up worse and at risk of getting permanently damaged beyond repair.
7. Family Fatigue
From family feud to family fatigue.
It’s nice to spend quality time with the family. But when you see each other the entire day, the quality of the time spent suffers that it feels more like quantity time.
There are days you just want to find your own space but that might not be possible when you’re working for the family business.
Conclusion: 4 Things To Think About Before Working In The Family Business
“Resign from your job and come work for the family business. It’s better to work for your family than anyone else.”
Before you let your Dad’s sales pitch get to you, here are 4 things you should think about before making a decision to work for the family business.
1. What Is Your Motivation?
Your motivation is your “why”. It’s often described as your purpose and the thing that makes you get up in the morning and seize the day.
Why should you work for the family business?
- Because Dad said so.
- Because I want to be the Boss.
- Because I have nowhere else to go.
- Because I want to be secure.
- Because no one else in the family wants to.
According to a study, 70% of family owned businesses close down before it reaches the 3rd generation. The findings of the study which was conducted in the 1980s, hold true today.
The primary reason for failure is that the succeeding generation is “obligated” to join and no additional or skill-specific training is given to the children.
A sense of entitlement arises and the children decide to implement changes sometimes without the approval of the parents. If the imposed changes aren’t in line with the brand’s message, they might put off the current market base and disrupt the growth of the company.
Whatever your motivation is, it must be aligned with your long-term vision for the company and your career. Otherwise, the company won’t flourish under your watch. Remember, even if the business is turned over to you, it’s never about you. It will always be about the family.
2. How Are Your Relationships With Your Family Members?
If asked to describe in one word your relationship with some family members and the word that comes out is “toxic”, it might be best not to work for the family business.
Relationships that have remained strained in the family for years, even decades, cannot be rectified by working together in an environment where decision-making sessions become forums for conflicts to take place.
3. Are You Okay About Losing Boundaries?
How do you feel about taking orders from your youngest sibling? Are you okay with the idea of canceling vacations with your spouse and children because your Dad wants you to attend a weekend trade show? How about the idea that family members can just encroach on your personal space and “me time” for the sake of the business?
These are incidents that can happen if you choose to work for the family business. You’ll realize that things aren’t that much different from your former 9-to-5 desk job.
4. Is This What You Want To Do?
It’s not uncommon for parents to push their children to participate in sports while they’re young. You might have found yourself avoiding tackles on the football field when all you wanted to do was draw comic books in your spare time.
You’re no longer a child and you can make your own decisions.
Is working for the family business what you really want to do? Or like we discussed in #1, did you feel obligated by your parents to do so?
Whether it’s for the family business or not, when it comes to your career, pursue what you really want to do.
If you’re in the family business to fulfill your parents’ wishes and not your own dreams, you might end up being miserable even if you succeed. You’ll realize that the time invested in the family business could have been allocated to the pursuit of your own entrepreneurial goals.
It’s okay to live vicariously through our parents but we shouldn’t lose sight of what we want for ourselves.
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