Family business

BoiPolar

Hi all, long time reader of boards but never set up an account before now..

Anyway, just looking for a bit of advice regarding my career path basically.

At the moment I'm in my mid 20s and have a good job in the property industry in the UK and am on good money with all expenses covered and plenty of room for promotion within the company.

My parents run a successful company at home, won't go into specifics but has about 15 employed and is a strong, profitable company. My parents are semi retired now but still have a strong input and interest in the company.

There's space now for me to take over running that business but it is not related to my education background. It is essentially to run the business and if I did get into it would want to try expanding and growing it.

I know the business very well as I worked there for as long as I can remember.

I'm unsure what to do as if I stay in my current role, I see myself going far with the company or at least the industry but if I took over at home would have the chance to run a company and gain all the associated experience which would probably be good for me and my career anyway in general.

If I did not take over, my parents would probably either sell the business if someone were to pay enough or more likely just retire and remain as directors with salaries etc with minimal input. No one working there would have the incentive to expand the business, just let it tick over and I think it would be a shame to miss out on potential growth.

So what would you do? I appreciate I am lucky to have this decision to make but would like to hope I make the right one..

Thanks

jimmii

No one but you can answer that unfortunately! Would you like to run the family business or just prefer to have the comfort and safety of the job? If you need convincing the family business is the right thing to then that means it probably isn't. It's likely to be a steep learning curve but at least you're going to be able to ask the people who the business better than any other. Go with your gut as it is a tricky situation given its your parents business. Good luck!

BoiPolar

jimmii wrote: »

No one but you can answer that unfortunately! Would you like to run the family business or just prefer to have the comfort and safety of the job? If you need convincing the family business is the right thing to then that means it probably isn't. It's likely to be a steep learning curve but at least you're going to be able to ask the people who the business better than any other. Go with your gut as it is a tricky situation given its your parents business. Good luck!

Thanks for the input! Yeah I guess it's impossible for anyone but me to decide.
I think it would be a steep learning curve indeed but the experience of that would probably be beneficial.
In terms of the job, I'd say I would prefer to be my own boss and get back what effort I put in which mightn't always happen if I stayed working for someone else.

mrawkward

Not at all sure that running your own business is a career advancing move in my book... Becomes very difficult to re-enter the jobs market at any senior level. If you decide to do it, forget ever being employed again. You enthusiasm seems rather limp from your post! You really need a minimum 100%...

jimmii

BoiPolar wrote: »

Thanks for the input! Yeah I guess it's impossible for anyone but me to decide.
I think it would be a steep learning curve indeed but the experience of that would probably be beneficial.
In terms of the job, I'd say I would prefer to be my own boss and get back what effort I put in which mightn't always happen if I stayed working for someone else.

Being your own boss is definitely very rewarding but you have to be the right type of person as it really doesn't suit everyone.

__Robinhood__

Hi OP,

I was essentially in a very similar position to you last Jan. I'm 26, worked in a US based medical device company for 4 years and made a nice base to go far. I really enjoyed it there and had alot of motivation to climb the corporate ladder.

However, a family business that was going quite well had similarly been put to me - take it or leave it. 22 people working there, had 55 there 3 years back but I always sensed that a number of missed opportunities and lack of application over the past while has seen this decline.

In short, I decided to go with it. I decided to take on a business masters on the side in an effort to combat high level admin. My reasoning was if this all went T**ts up, Ill still have a masters falling back into corporate land in 2-3 years.

I was used to answering emails at 12-1am and 13/14 hour days anyway so its not much of a change lifestyle wise although the daily highs and lows have alot more weight! I do find it exciting but when you see close friends move to Dubai/London/NY there are moments!

There is definitely more freedom- Im a believer that 'the worst day working for yourself...is always better than working for someone else'

Good Luck

antoinolachtnai

You have to look at where you think you will be in five or ten years time I think.

Will you be happy enough on the career trajectory you are on, and living where you are or would you be happier at home, doing this?

I would say (and this is controversial) that there is a third option. You move back to Ireland and take a corporate job, or at the very least, find a way to spend a few weekends a month back home. In the family company, you take the responsibility of bringing strong governance and direction to the family firm. Under this governance and direction you bring in/up a strong managing director or chief executive who will drive forward the development of the family firm. At a certain point, you might move back into the company, or the new management might buy the firm off you (hopefully for a better price than if you just sold it tomorrow).

This option is not for everyone. If you haven't been along a few rungs of management then it might be a bit too much. You have to look at whether you can add value this way. It isn't for everybody but it is an option. (Anecdotally, I think you see this a bit more in the US than here.)

Whatever way, I would be quite deliberate about this, and it is good you are thinking about this. The real question is how you can maximise the value of the family business for all involved.

A successful family business to take over that you can be your own boss, instead of working for someone else be it cushy or not to me is a no brainer. You should be jumping at such an opportunity. You know the business very well, you have your parents to give you advice if you come across any challenges that your education doesn't cover as well as 15 employees. Sounds like your being served up your golden ticket on a silver platter, and if you dont take it your gonna regret it big time down the line when your pissed off working for people....I would disagree with the 'is it for me?' thinking. All a bit wishy washy. Give yourself a slap in the face and take this opportunity!

BoiPolar

The more I consider it and read the different responses, I think I would regret not doing it more so than doing it and it not going as well as hoped.
My career path over the next 5-10 years is probably fairly predictable while taking over at home is more of an unknown which makes it appealing.

As was mentioned, appointing a director to drive the business should be an option and had entered my mind. This would be a fairly easy option if someone already working there suited but unfortunately not and an outside hire to fit the bill would be hard to find..

DubTony

BoiPolar wrote: »

As was mentioned, appointing a director to drive the business should be an option and had entered my mind. This would be a fairly easy option if someone already working there suited but unfortunately not and an outside hire to fit the bill would be hard to find..

This shouldn't be a reason not to do it. Hire an Executive Recruitment company to find the right person for you. A good one will help you figure out exactly the type of person you need.

mrawkward

Is it profitable enough to pay a professional manager to run it, give you a return and provide for your parents?
Do you have siblings? if so where are they in all of this?
Are your parents intending to sign over the business to you lock stock and barrell?
Have you considered the taxation implications of this?

BoiPolar

mrawkward wrote: »

Is it profitable enough to pay a professional manager to run it, give you a return and provide for your parents?
Do you have siblings? if so where are they in all of this?
Are your parents intending to sign over the business to you lock stock and barrell?
Have you considered the taxation implications of this?

It could handle the cost of a manager alright but I don't think we would go this route the more I think about it.

I have other siblings but they aren't interested and I was always much more involved in this business than them.
If I took the business, they would be entitled to a bigger portion of something else or a small stake in the company to balance it all out so all is fair.

I am aware of the tax implications and know there are some reliefs available but paying tax is unavoidable anyway here.

mrawkward

If you take it on, be the sole owner. If you grow it to greater success, count on irrational sibling jealousy...he got the family silver and all that. Older heads will be well familiar with the story!

ironclaw

mrawkward wrote: »

If you take it on, be the sole owner. If you grow it to greater success, count on irrational sibling jealousy...he got the family silver and all that. Older heads will be well familiar with the story!

If you do decide to take it OP, I would heed this advice and take it quite seriously. Many a family has been torn apart when news gets out that 'so and so' is doing well.

Get it all down on paper as the last thing you want is when you have 1000 employee's and get bought out for millions is a line around the estate waiting for a hand out.

antoinolachtnai

If i weee you I would give yourself plenty of time to figure out your plan.

Could you work in another family owned business for a while, 0pergaps in the U.K. to get an idea of their approach?

I think Enterprise Ireland have some sort of unit that supports family businesses. They try to help with issues like structures and succession. Now is the time to engage with them, or with some other advisor.

mrawkward

Enterprise Ireland schemes are only open to manufacturing or internationally traded services operations, would you qualify? if you do, they have some great programmes.

antoinolachtnai

EI do (or at least did) have something specific for the family sector. I think it is in conjunction with another group. There is also this group (http://www.familybusiness.ie/services/our-services-). I do not know them but I know one of their customers (a family with a substantial business) and they seem to have made some progress with them in a difficult enough situation. I am not saying they always succeed, but they certainly do have resources and they work hard at it. Of course all of this has to be paid for in one form or another, but good advice is always cheap.

mrawkward

mrawkward wrote: »

Enterprise Ireland schemes are only open to manufacturing or internationally traded services operations, would you qualify? if you do, they have some great programmes.

OP, is the business an EI client or even eligible for their programmes?

gargargar

Without specifics I think it is a great opportunity.

Some potential negatives that might be worth considering:

- Is there a future for the business? If it was a taxi company, might not be a good bet etc.
- Will your parents be prepared to let you run the business? It has been their business and they will think they know better. Will it cause arguments?
- If it is successful will it cause a rift with your siblings? Many siblings fall out over money.

None of these are massive problems but it might be worth making sure they don't raise their head. Best of luck.

BoiPolar

mrawkward wrote: »

OP, is the business an EI client or even eligible for their programmes?

I think there has been contact before but nothing major ever came of it. Worth a look alright as it is it would fall under manufacturing and there is a some exports, mainly you Irish companies with bases abroad.

As far as a future for the business/industry I think it is safe with potential to move into other sectors as well.

Ownership wise, the comments here have made me realise I need full ownership to make it worth my while and put full effort into it and avoid trouble down the line.

For the moment, my parents are still happy to be involved and enjoy running it (just moved into a new/larger premises) but will probably start to take a step back so I think we will take our time but have a plan in place.

I don't have to step in immediately but I think we will now plan on me taking over and as my parents want to become less involved I will step in.

M.T.D

I don't have to step in immediately but I think we will now plan on me taking over and as my parents want to become less involved I will step in.
This sentence has prompted my response.

My personal experience only. Many years ago with "family" business. I let my own fledging business run down and worked in the family business with my father (md) and company secretary supposed to be becoming less involved. Skip several years both still there, well past retirement age, blocking any new ideas that need any capital at all, even getting a computer in for accounts, letters etc.. Eventually, after yet another "control" discussion I walked.
I should have had a proper agreement at the very start, with dates for change over, transfer of shares etc..

mrawkward

Good to see that the exchange on here helped to identify some issues and present some sort of a path to move forward.

54and56

BoiPolar wrote: »

I don't have to step in immediately but I think we will now plan on me taking over and as my parents want to become less involved I will step in.

My strong advice is to keep doing what you're doing until you have a succession plan hammered out and documented. People (even parents/children) often start out with honest well held intentions but circumstances change both personally, within the business and within the industry the business operates in.

Your parents have made a success of the business and gotten it to where it is today, they have a wealth of experience you should tap into but many find it very hard to let go and often become back seat drivers i.e. you may well be given the CEO role but if they retain a significant shareholding and/or directorships you can quickly find yourself in a situation where you are merely implementing their instructions or limited to doing what you can get their agreement on.

Whilst working external to the company you have leverage to get these issues nailed down before you jump back into the business. As soon as you are back in the business you have zero (or near zero) leverage to push things through.

Depending on your parents circumstances and level of interest they could remain as non exec directors (with one of them non exec "Chairman") who attend and contribute to a monthly management meeting where the financial and operating performance of the business is reviewed and their input is sought but they wouldn't have a veto over your executive decision making.

That's my tuppence worth.

mrawkward

As I said, go solo or don't go at all. Anyone who has actually been there will know it is the only way. The alternative is for dreamers, who will always regret not taking this piece of advice.