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We’d like to extend our sincere gratitude to Jim Counts of Counts Consulting, LLC for allowing us to post their previously published article. Permission granted VIA email 10/13/11. All articles are reprinted in their entirety as originally published.

How do you expect this to work out

When my father had his second heart attack and the doctor told him he needed to reduce the stress in his life, he called me and asked me to come home for a visit. I was in college at the time hoping to learn how to do “something”. That weekend my father approached me about moving back home and taking on the task of running the business. Having grown up working there I knew what was involved. However, the thing I wanted to know, more than how much it would pay or the position I would have, was simply how we would work out the purchase of the business. I wanted to know that if I was changing my life to work in the family business that I was going to actually own something sometime in the future. I wanted to know a general plan before I made the change. Not 5, 10, 15 or 20 years later, right then. The only answer I could get was “we will work out something”.

I went back to college and my father sold the business to someone else.

I see quite a few young men and women who are working in their families’ business with no real plan or understanding of how the future is going to play out. When I ask questions they often think they will inherit it when their parents pass away or admit they have no idea.

Let me tell you a few stories: I know a brother and sister team who thought they would inherit until their parents walked in with the new owners one day. The kids were blown over, and after the dust settled, the parents said they had never considered giving the business to the kids. They had always planned to sell it to fund their retirement.

Another father told me and his child that he was working on getting the estate set up so the child running the business would inherit the business. He died suddenly and the whole extended family got involved. Now the siblings rarely speak to each other, and the grandchildren don’t want anything to do with grandma.

Another family had an enabled son who refused to keep a job. He couldn’t work with other employees or family members so they had to fire him. When the father and mother had both passed away, the son who had been running the business for over 30 years discovered his parents left half the business to the deadbeat brother.

The son of a second generation business told me he would not have to buy the company from his folks since they would will it to him. I ask him if he was sure and discovered his was simply an assumption. When the son actually found out what his parents plan was, he was so angry they could not have Thanksgiving together.

I know of several situations where children are paid equally even though one or more of them do little, if any, work. The parents expect the hard working sibling to support his brothers and sisters who won’t work. So how do you think the division will go when this will is read?

Next, let me address the idea that because you may have worked at the family business for 5, 10, 15 or 20 years, you assume you are entitled to be given the business or get a larger share than other siblings. If you have been told that or you have been working for an employee’s wage while running the company, you should get special consideration. However, if you have been paid well for running the company and received considerable benefits than others do not enjoy, then I don’t think you have any special consideration coming. You have been paid for what you do just like any manager of any company in the world. Managing a business does not entitle you to ownership.

The moral of the story is you need to know what is going to happen down the road. Parents are notorious for not facing the facts about some of their children, and children are notorious for assuming they know what is going to take place. Please don’t let your family relationships suffer or be destroyed by miscommunication or lack of it. There is nothing wrong with asking. After all, it’s your life and your family’s future we are considering.

www.CountsConsulting.com   –  JimCounts@USA.com  – 817-238-9991