Buyouts and Family Business

As a child I thought it would be cool to be part of a family business. It would be a guaranteed job and easy. While the idea is great as long as someone else started it I would never do it today.

Growing up I watched my Grandfather run a home based family and marriage counselling practice. Additionally he was an LDS Institute Director at American River College in Sacramento, California. My grandmother was his secretary and my aunts dutifully helped us grand-kids remain quite during the summer while we were visiting. Fast forward a many years and my Aunt Gayle and Uncle Paul have followed a similar path. Both work for local school districts as guidance counselors and do some private practice counseling with LDS Social Services on the side. At one point my Uncle even took over some of my grandfather's clients when his health was failing him. While this could have been a 2nd generation business my aunt and uncle chose to go a different direction focusing more on school counseling with the option for private practice sometime in the future. I think this has been the best decision for all involved. While my mom's family is close I can see how passing on a business to one child and not another might have caused some strife especially as another aunt has gone through a divorce and seven additional grandchildren have been added.

As we learned in our case studies this week having an exit strategy is critical in a family business. Also, clearly defining roles that each member will fill helps to keep the business and business and the family the family.  While children may be interested in the family business it is also important for them to get "working" experience outside the business so that they can really see if they are committed to the business or if they are only committed to satisfy the need of the family. Identifying the level of commitment will help a business move from one generation to another. Another aspect to consider is how the business is divided. It is salary based or is it equity based and what are the terms for changing the equity/salary.  Understanding this is important when additional employees are added that are not family. There will be many decisions that need to be made and it won't always be family making them.

$100 Challenge
I received an additional customer order this week adding $12 to my project total. I also had three haircuts instead of two netting an additional $30 bringing my project total to $132. So glad to be done with this part of the project!  I am so not a salesperson who likes to push things (even those things I believe in) on others. I am also a salespersons worst dream as 99% of the time they cannot get be to buy up or change my initial decision. I generally come in well informed and don't need their help. I met the challenge but I know I could have done more had I had a passion for what I was doing. This has reinforced the notion that owning a business is not what I want to do in the foreseeable future and I am glad to have that confirmation.