Jeff Faulkner

Fathers and Sons - Understanding Where Dad May Be Coming From
May 23, 2008

The relationship between fathers and sons in business is a complex one to be sure. I often hear the following from children in a family business – “I want dad to be able to just go and enjoy the fruits of his labor. Why won’t he take more time away and trust me with the business?” This particular dynamic is not altogether complicated, but may involve some things you haven’t considered. Follow these tips to help you understand your father and navigate more effectively with him in the succession process.

• Tip 1 – Realize that your parents may be financially dependent on ongoing business profitability. Most business owners plow their hard earned money right back into the business. It’s what made the business successful. Furthermore, as their income increased over the years, so did their lifestyle. And they are not about to place their financial dependence in your hands. Understanding this will allow you to relax with the timeframe. It may also assist you in conversations with your parents about what their plans are for their future and how well prepared they are.
• Tip 2 – Recognize that your parents may be carrying substantial liability through personal guarantees of debt on the business. If you are not in a position to have personal guarantees transferred onto your shoulders, I strongly recommend that you give consideration to this very important aspect of succession planning. Your father is not going to relieve himself from the responsibilities of the business as long as it’s his butt that’s on the hook.
• Tip 3 – Realize that the business is your parent’s baby. I’ve been toured around many facilities when at the end of the tour the business owner instinctively stretched out his arms and said “that’s my baby.” Emotionally, it’s incredibly difficult for your father to let go of the business. King Solomon wrote the following in Ecclesiastes 2:17- 21:

I hated all the things I had toiled for under the sun, because I must leave them to the one who comes after me. And who knows whether he will be a wise man or a fool? Yet he will have control over all the work into which I have poured my effort and skill under the sun. This too is meaningless. So my heart began to despair over all my toilsome labor under the sun. For a man may do his work with wisdom, knowledge and skill, and then he must leave all he owns to someone who has not worked for it. This too is meaningless and a great misfortune.

Understanding these basic issues will hopefully allow you to relax with the process and cut your dad some slack.

Posted by Jeff Faulkner on May 23, 2008 | Comments (0)