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Family Business – Are You Raising Children or Successors?

Paul Inkles

If you own a small business that involves family members, I’ve got a question for you:

Do you have a family-oriented business or a business-oriented family?

It doesn’t really matter what your answer is…

What if I just showed up one night for dinner at your house? Is it likely you would be there for dinner? And if I asked your kids the “family-oriented business or business-oriented family” question, what kind of answer do you think I’d get?

If you have a business-oriented family, your kids are going to get the clear message that your first love is the business and they come…well, somewhere down the line.

I’ve dealt with numerous estate planning situations where the family patriarch was desperately trying to prevent his legacy from dying with him, while surrounded by a dysfunctional family that was built with far less care and attention than his business.

So if you had to choose one over the other, which would it be – family or business?

Actually, you may have already chosen.

So maybe it’s time to re-evaluate your choice to make sure it’s one you can live with. And one you can die with.

But can a family-oriented business survive, thrive and maintain balance? I believe they can, but only if you tend to your family as carefully as you do your business.

1. Focus on your family, not just your business. Most children (and spouses!) spell love T-I-M-E. Why not carve out one night a week that is Family Night. Make sure these times are full of fun, laughter, conversation and activity. Watching TV or going to the movies is not a great way to spend family night.

2. Focus on their goals, not your goals for them. Your children were each created with a very unique bent. Try to find positive things at which they can excel. Your interest in their interests makes huge deposits in their emotional bank accounts.

3. Offer opportunities for involvement in your business. This is going to vary by age, but you’re simply trying to impress upon your children that work is a place friendly to them, not their competition for your love and attention.

It should not be unusual for your children to visit you at work. As they get older, let them be involved in doing small jobs around the office or work place (safety first, of course!). This is obviously not to get cheap child labor, but to show them work is something they can do as part of the family. But never force this. These are opportunities, not obligations.

You can’t force your children to want to join the family business.

But you can ensure that the family business entity is never seen by your family as the family business enemy.

If you focus on raising successors, you run the chance of losing your children. But if you’ll focus on raising children rather than successors, you might just get both.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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