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How to Tell Your Child that Running the Family Business Isn’t Within Reach

How to Tell Your Child that Running the Family Business Isn’t Within Reach

Besides sleeping, work is where we spend the vast majority of our time. Huffington Post estimates about 25 percent of our lives are spent working. That makes sense — we need money to live. We also gain a sense of accomplishment through work. However, once the day is done, what we really want to do is spend time with the people we love. That is what makes a family business really great: You get to spend a good part of your life with the people you love. Unfortunately, it’s not quite that easy.

Business owners always dream of having their children become a part of the business. You get to work with them, they get to see how good you are at work and be proud of you, and then, with all your knowledge, you can really train them to become great at doing the work — maybe become better than you one day. They can get on the “executive path” at a young age. Instead of grinding it out doing payroll for 10 years, they can be involved in all the significant projects and decisions that go on. You can introduce them to your key customers and suppliers, and give them significant responsibility at a young age to really prepare them to take over the company one day.

However, it’s still a two-way street. The children have to be sufficiently interested in and capable of doing the work.

We all love our children. We see their strengths and believe they can do well. As parents, we help them find ways to discover where their talents can be applied. Part of being a parent is also trying to give our children confidence by letting them know we have confidence in them. “Get in there son! I know you can do it!”

As a result, part of telling your own child that he or she won’t be the leader of the company is telling it to yourself first.

Sometimes the hole is deeper. Many family business leaders suspect in their heart that their child isn’t a good fit to lead the company, but their desire is so strong, or the outside pressure is so intense, or they are so afraid of hurting the child, that they allow the child to take the helm regardless of whether it’s a mismatch. What the parent must realize is the potential consequences of failure for the employees, other family members, customers, suppliers and, of course, the child him- or herself. The best way to help your child is to not steer the child down a path that ultimately leads to life failure.

If you can get past these issues, then the biggest challenge is helping your child understand that he or she is not “the one,” and that’s okay. The goal here is help your child see that while he or she may not be the leader, all the happiness and self-esteem in the world is still out there to be found — a fulfilling job, financial rewards, potential for growth and more.

The first place to begin is helping your child understand rationally that there is a lot of responsibility that comes with being the leader of the business. The best way to know if someone can take on the responsibility of being the leader is to examine the person’s performance in relation to the amount of responsibility required in a current position. If it’s already too much to manage, how can he or she handle having the ultimate responsibility?

Along the same lines, leader positions require broad knowledge and skills. Not only must the person have an understanding of and experience in each area of the company, leaders have to hire, manage and fire employees; be the chief sales person; and figure out where the company needs to be in three, five, and ten years — and how to get there. No easy task.

The logical conversation reaches a crescendo with the understanding of the difference between leadership and ownership: The leader runs the business to maximize long-term profit, while the owner takes all the profit. If you are going to be an owner of the business, you want the business to be as profitable as possible. As such, you want to get the best person possible to run the business.

Moving into the more subtle side of the conversation, make your case using comparisons. Describe the amount of work that you do as the leader compared with that of another employee, or perhaps another family member whose performance falls more in line with that of a leader. This doesn’t make the other worker a better person — just someone who is better at that job.

Many times when I have gained the trust of next generation family members, I ask whether becoming the leader of the company is what they really want to do with their lives. Oftentimes I find out that it isn’t, but they may be afraid to leave their positions in the company because that would mean moving into the unknown. They also wonder whether they could get another job, whether they’d be good at it, and whether it will pay them enough or be as accommodating. I contend that these are obstacles that can be overcome.

However, the greatest challenge is having that very first conversation with your child. “I love you, and I know that your happiness, work fulfillment, and financial security are all well within reach, but there’s a possibility you may not be the best person to run this business in the future.”


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by Henry Hutcheson // Henry Hutcheson, a Certified Management Consultant and Certified Family Business Advisor is the founder and president of Family Business USA . His new book is "Dirty Little Secrets of Family Business (3rd edition): Ensuring Success from One Generation to the Next". Learn more at

Opinions expressed by contributors are their own.