I grew up in a home where my dad was an entrepreneur. He owned, managed, built and developed mobile home parks. After I graduated college, my dad didn’t offer me a job. With no money and no means of support, I had to go and get a real job, work for a real company and live on money I earned!
In retrospect, this was the best career builder I could have experienced. I had to find a company to hire me, work within their system, do what they wanted and get promoted based on my merits as an employee. Many of my college friends took the easy route and went to work at their dads’ companies. Thirty-five years later, they’re still working for the family businesses. They complain as they wait for their dad to retire so they can finally take over, make some real money, and have some freedom. They postponed their lives and personal achievement waiting for unspoken promises their dads never communicated nor offered.
60 and Still Waiting!
A 60-year-old ran his dad’s excavation contracting company for over 20 years. His dad is 85, has medical problems and hasn’t been able to come into the office for the last five years. Twenty years ago, the company was small and doing $500,000 in sales. Today, under the son’s leadership, it averages $8 million in volume per year and makes a net profit of around $700,000 annually. The son is tired of the situation. His dad still owns 100 percent of the company stock and only pays his son $7,500 per month plus the use of a company pickup truck. The son works 80 hours per week, is not trusted to sign checks, and can’t make any decisions or major purchases. The son wants to quit, start his own company and fire his dad. What would you advise him to do?
I get lots of emails from children who work in family construction businesses. They write because they’re disappointed with their situations, unhappy how they’re treated, and not respected by other employees. There is a common desire to do more, want more and get more than they are currently getting.
Commit or Say Goodbye!
Before children should be considered for ownership, they must earn their position of leadership and contribute to both the bottom and top lines. If earned, dad must be willing to sit down and tell them the truth about his ownership transition plan. Often the dad strings his kids along by never making a decision when or if the transition will take place, how the ownership will be earned or distributed, and when he will step back and retire. These unclear plans cause the children to get frustrated and unhappy.
My recommendation is to ask for dad’s transition plan. If they don’t get satisfactory answers, amounts and dates, start looking for new jobs. I have heard too many stories of sons waiting for their dads to give them the company only to find out it won’t happen for 20 or 30 more years.
People Don’t Change!
People don’t change unless they want to change. The dad in these stories doesn’t have any reason to change, let go or give his child ownership. For them to get dad to change and offer ownership, more accountability and additional responsibility, they must lay out a positive business plan for their increased role in the company. If dad won’t agree or doesn’t want to change, they must be willing and ready to quit working for the family business and get on with their lives.
Should I Work For My Dad?
Why would a young high school son or daughter want to start working immediately for their dad after graduation? By going to work for his dad, the son won’t have to take any employment risks, won’t have to experience the challenges of college, or worry about finding a job in the future. And the son thinks he might get to run his dad’s company some day. But does the son have any assurance the company will fulfill his dreams and promises? Will the company still be around when his dad finally turns it over to him 50 years later? Will not having a college degree hurt him in the future? What if the son doesn’t like construction and wants to change his career path?
What Should My Child Do?
My advice is to go to college and get a degree in what you feel is best for your future. If construction is your career path, get a degree in construction management or civil engineering. After graduation, go to work for a major construction company that has an intern program. Learn as much as you can, work hard and get promoted. Practice your newly acquired skills and grow into a valuable management team player and contribute to the bottom line in a major way.
When you become a success on your own, you’re ready to apply for a leadership position at your dad’s company. But only accept an offer under your terms with a written agreement about your responsibility, stock ownership and profit sharing. Be ready to work harder than anyone else. Expect no special favors and earn your pay like a professional. Get promoted to stockholder and help the company grow to the next level as your dad backs off and lets go.
When a child works for their dad’s company, they should always ask themselves if they could do better, make more money, have more responsibility, have more fun, or get ahead faster at another company. They should never postpone their future waiting for dad to potentially give them a piece of the company.
If your dad isn’t willing to be open and honest with you about the future of his company, ownership, transition and compensation, you have no choice but to fi re him by quitting. Aren’t family businesses fun?
George Hedley, CSP, CPBC, helps contractors grow and profit as a professional business coach, popular speaker and peer group leader. He is the author of “Get Your Construction Business to Always Make a Profit!” and “Hardhat BIZSCHOOL Online University” available on his website. Visit www.hardhatbizschool.com for more information.