Preparing Your Kids to Eventually Succeed You in a Family Business

Preparing Your Kids to Eventually Succeed You in a Family Business - family image

Even though running a budget of a family business and running a household budget are in no way the same thing, they are more than closely related. In a way, the way in which you handle your family finances reflects the way in which a family business is governed. First, you start with one generation (the parents) who are in charge of running the household/company and then proceed to pass on the baton to their successors.

At first, children or earning young adults are in charge of no more than slightly contributing, while in time they might start to play more vital role in the decision-making process as well. With this in mind, here are a few ways in which teaching your kids about household chores and budget might prepare them to take your place in the family business when the time comes.

1.      The division of roles and responsibilities

The first obvious connection between these two notions is reflected through the issue of roles and responsibilities. Each family member gets assigned tasks that are in accordance with their abilities and experience. For instance, you wouldn’t expect a 10-year-old to do the entire grocery run, but you might ask them to clean the bathroom, wash windows or even wash the car. Nonetheless, once you start adding these responsibilities, you need to give more recognition to your child in order to keep them motivated. Otherwise, you might make them feel underappreciated, which might discourage them from taking future initiative within the company.

2.      Start early

Another thing you need to keep in mind is that the age of the child (we used in the previous example) is not the best indicator of the part that they should take in the company. Corporate experience is a much more reliable factor. Of course, we are not suggesting you should push your child in a company business before they are ready or exploit child labor. Still, you could have them run some business errands during weekends or breaks at quite an early age. In this way, you can include them in the numerous processes of your business and have them learn about the company from inside.

3.      Use the perspective of their generation

From these menial positions, they will later advance to some more delicate administrative tasks and in time even advance to a decision-making position. You see, the generation Z (the post-millennials) tends to be much more hyper-connected to the world and therefore might have some radical new ideas your company as a whole might benefit from.

For instance, you might ask your teen about the advice surrounding your company’s social media campaign, especially if their peers are one of your target demographics. Next, you might consult them when inquiring about LED lighting solutions for your business and see where they stand in this regard. Having someone else (someone adult) actually need their opinion is definitely going to make them feel appreciated.

4.      Teach them the value of money

Finally, one of the most important lessons that any parent can teach their child is – the real value of money. By introducing them to a family business you can show them where your family’s income comes from and in this way demonstrate that there is a finite amount of it that needs to be managed carefully. Next, instead of giving them an allowance, you can give them a ‘salary’ for all the hard work they invest in the household and family business. In the end, make sure they know the difference between emotional and rational purchases and in this way nurture healthy spending habits. They will need this as both adults and future management of your company.

A lot of young people whose parents own family businesses feel the urge to abandon it and start something of their own. This, however, most commonly happens due to a mistake in the attitude that these parents sometimes assume. You need to make it clear from the very beginning that the company in question is not ‘mine’ but ‘ours’ and that they are the part of it from the moment you start it. Even if they are too small to serve as its active part, these children are probably the motivator of its existence. It is your job to make them feel this way, as well as to prepare them for all that is to come.