Which Comes First, the Family or the Business?

 

Sam: Robert, when your oldest daughter wanted to come into the business, I didn’t argue. She was focused on marketing and we needed her help. But now you want your other two kids to come in also?

 

Robert: Sam, I’ve been your brother-in-law and your business partner for over twenty years. I know you became a father later in life and you won’t face this issue for some time, but if you were in my situation, I’d welcome your children. What are we working for if it’s not to build something for the kids?

 

Sam: Are we supposed to invent jobs for our offspring just because they want to come in? At least let them work somewhere else first.

 

Robert reflects: I know Sam cares about my kids. After all, they’re his sister’s children, too. He knows the outside job market is impossible. Surely we can find positions for them—or shift a few people around to make room.

 

Sam considers his conversation with Robert: He might have had one daughter who was capable, but I don’t know about the other two. Maybe he’s disappointed now that I have an heir and the whole business won’t ultimately go to his side of the family. Would Robert really feel the same way if my child wanted to come in? Or is he trying to stack the deck in his favor early on?

 

What’s at issue here?

 

From Robert’s viewpoint, the role of the business is to support the family, to be a source of employment to those family members who desire entry. If this means modifying the business to accommodate family members, especially his own children, then so be it.

 

Sam is clear about his personal vision of the business as an independent entity that the family must serve to ensure success. He doesn’t necessarily consider the business a mere tool that can be adjusted to serve the family.

 

What should the family do?

 

1. Sam and Robert need to continue their discussions with theunderstanding that there are no “rights” or “wrongs” here. Both views are valid and reasonable, if perhaps not compatible.

 

2. Some mending of fences is also in order. Buy-sell agreements need to be reviewed and estate plans should be shared. Keeping secrecy and surprises to a minimum will lessen anxiety for all.

 

3. Robert and Sam must address contingencies beyond those covered by an estate plan and a partnership buy-sell agreement. If both men live a long time, is maintenance of the partnership in their best interests, or in the best interests of the family or the business?

 

4. Entry requirements must be established. Should the kids be expected to meet educational or outside employment requirements? Will jobs be created for family members? What about salary and supervision?

 

Communication is the key to harmony here. Full and open dialogue, initiated well before the issues reach crisis status, is critical to maintaining a healthy family and a healthy family business.

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