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Taking Over a Family Business

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When a child takes over a family business they immediately become an entrepreneur. This can be a daunting undertaking if the child is not prepared or is not inclined to be a business owner. So, here are some things to consider.

Entrepreneurs are a special breed and to show this, I’ve identified about 70 characteristics of an entrepreneur, and here they are, in no special order:

Dealmaker, Risktaker, Risk mitigator, Innovative, Creative, Disrupter, Delegator, Empowers team members, Motivator, Looks like a leader, Relevant, Opportunity seeker, Decisive, A bias for action, Gets things done, Organizer, Process oriented, Responsible, Inspires Trust, Dedicated, Financially astute, Bold, Good judge of people, Promoter and marketer, Eager to learn, Likes to learn, Success focused, Driven to succeed, Learns from errors, Not afraid to make mistakes, Hates mistakes, Looks to understand all sides of an issue, Visionary, Inquisitive, Optimistic, Ambitious, Adaptable, Has integrity, Truthful, Has broad interests, Thinks outside the box, Communicative, Self-motivated, Strategic, Team builder, Determined, Curious, Balanced, Passionate, Interested, Engaged, Blunt but also diplomatic, Customer/market focused, Keen supervisor and mentor, Willing to try new things, Planner, Prepared, Does the research, Effective, Efficient, Resilient, Resourceful, Relevant, Adroit record keeper, Searches for cash flow, Feels that he or she must succeed, Must be a leader, Obsessed, Enthusiastic.

As far as I am concerned, entrepreneurs are the most resourceful, independent, responsible, smartest and loneliest people. It is very hard but also very exciting, challenging, interesting, exhilarating, satisfying and fun. I never want to talk someone out of becoming a business owner except if I feel they do not have most of the characteristics listed here, and likely even a few more.

This article was prompted by the son of my electrician whom it seems will take over the business…someday. His technical skills are tops (I know that from work he has done for us the last few years); his responsiveness is the best; he listens; he explains what he will be doing; he is clear before he starts about the price; and he somehow always shows us what else we need done. He also told my wife he really loves what he is doing. He has a passion for being an electrician and seems to have an obsession to be the best of anyone at it. These are the makings of a great business owner.

However, I spoke with his father and he is concerned that his son needs to learn the non-technical and noncustomer facing part of running a business and the back of the house realities. The skills he needs to learn include managing cash flow, meeting the payroll, costing out larger jobs and determining the pricing, scheduling the work, negotiating leases and contracts, dealing with vendor deliveries and the supply chain, maintaining inventory and equipping trucks, supporting community activities, advertising, marketing, promotion and social media, embracing technology, hiring electricians and other employees and training them and reviewing the financials and tax returns.

Some of these skills can be taught and some need to be experienced. Shadowing his father works, as do discussions and explanations of how things are done. Webinars and podcasts will also help, as will reading articles and books about entrepreneurship. The father is not planning on retiring so soon, so there is no urgency to this, but it must start and that could be in little bits and pieces. For now, the first step is a realization of the complexity of that undertaking.

If you have any tax, business, financial, leadership or management issues you want to discuss please do not hesitate to contact me at emendlowitz@withum.com.

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