Family business owners often are faced with the challenge of how to treat the next generation fairly when they want to join the business.
One of the ways to do this is to establish early on (still in high school?) what the parameters are for joining the business and, of course, communicating those parameters to the next generation.
All of the next generation then starts off on the same page and knows what they have to do to become part of the business.
Parameters need to be tailored for both the family and the business. Some of the parameters that have been utilized include the following:
- Graduate from an institution offering post-secondary education
- Attain and hold a job for at least two years that is outside of the family business
- Earn a pay increase during those two years
- Work together with the current owners of the business to come up with ways to increase revenue and/or decrease expenses within the next 12 months and beyond to justify bringing another person into the family business
- Work full-time for the family business for a minimum of two years
- Approval of all existing owners would be required
- Decision to join the business must be made by a specified age
- Must be willing to share the family’s long term focus which may not be short term profit opportunities
Creating realistic parameters for joining the family business establishes a consistent and unbiased process that the next generation can rely on.
