From the January 1996 issue of Entrepreneur

Entrepreneurs running family businesses hire their parents as consultants or employees for a variety of reasons:

  • The heir to the family business works out a consulting arrangement with a parent so the child can assume the helm while the parent provides occasional counsel.
  • Entrepreneurs looking for reliable assistance tap into the reasonably priced knowledge and dedication of parents who act either as consultants or as trusted employees.
  • Parents are facing uncertain financial futures. Pensions, once dependable retirement income sources, have shrunk. People are living longer and are fearful of outliving their money. Healthy, energetic people resist early retirement. And parents who lose their jobs as corporations downsize their work forces may have difficulty finding new positions. Worried adult children who feel responsible for "fixing" the situation may decide to hire their parents to help stabilize the parents' finances.

Does the shift in power, kids playing boss to their parents, work?

"Rarely," contends Fredda Herz Brown, a family business consultant in Leonia, New Jersey.

"It's too easy to fall back into the role of child," agrees Michael O'Malley, a family business consultant in Chicago. "Most children don't feel they have 'permission' to confront their parents. When there is a problem with a parent employee, most children become paralyzed and don't do anything to correct the problem for fear of losing the parent's love or affection." If a parent doesn't do a good job, it's often extraordinarily difficult to criticize, reproach or even steer him or her in the right direction.

Family business advisors point out several other concerns that come with hiring a parent:

  • History. "No matter what, a child will not be able to treat a parent as he or she would treat another employee," says O'Malley. "There's too much personal history. Kids don't have experience in measuring their parents' performance, and they're more likely to make excuses for them, such as 'They're doing the best they can' or 'I know it was done in my best interest.' "
  • Overstepping bounds. Bringing a parent in for moral support (as someone you can trust to give you kudos in addition to answering phones), can lead to tenuous situations, O'Malley warns. "When the business grows and becomes successful," he says, "the parent often feels his or her presence has been the key factor and assumes a position of power that's not justified."
  • Relationships. Parents change the climate of the business and your relationships with others. "Let's say your best salesperson gets into a tangle with your father," O'Malley hypothesizes. "As a son or daughter, how will you react to the situation? How will other people react? An emotional triangle develops."

Patricia Schiff Estess is president of Working Families Inc., a New York City consulting firm that publishes the newsletter Working Families, and author of Kids, Money & Values (Betterway Books).

Best-Case Scenario

Despite experts' skepticism about this arrangement, it sometimes works. In one business Brown works with, the father stepped down to let his son take over the firm but stayed on as a consultant. His responsibilities in this role are specific and limited. "The father wants his son to have complete authority in the company. Although he's in the office daily, he moved out of the 'big office' so his son could have it," Brown says. "It's interesting, though, that the son felt out of place in his father's office. At the father's urging, he redesigned the office. Now he feels comfortable as the boss-and as his father's boss."

Adele Kaplan had an impressive career of her own, which included directing the New Jersey Small Business Development Center at Rutgers University in Newark, New Jersey, before she started working for her sons. When she "retired" in 1988, Kaplan began working as a literacy volunteer teaching adults to read and coordinating a course in critical issues in world affairs at New York University in New York City. But she also had some free time. So she began helping her son David Liederman, founder of David's Cookies, in a number of different ways, including standing outside and ushering people into his cookie store in New York City. And when her other son, Bill, opened Mickey Mantle's Restaurant in the same city, Kaplan was there one day a week to greet patrons and answer mail.

Now her two sons have joined forces in a new venture, Television City, a TV memorabilia shop and soon-to-be restaurant across from New York City's Radio City Music Hall, and Kaplan is there twice a week greeting customers.

What does it feel like being your mom's boss? "We're totally confident that when Mom's in the store, customers will be treated well," says Bill.

"We're good together," agrees David. "When all the big issues are going wrong, we can laugh together over the dumbest things, like how we're going to sell six $19 pink elephants that nobody wants to buy."

Perhaps most helpful to the business relationship is that Kaplan doesn't believe in giving her entrepreneurially gifted sons advice. "They're entrepreneurs," she says. "I'm not." And besides, they already know her views on just about everything-"they have since they were 3!"

Guidelines For Success

Before embarking on a campaign to put Mom or Dad on the payroll, ask yourself some questions.

  • Why do you want to hire your parent? The best reason to hire anyone, parents included, is because the business needs that person's services. "The worst reason is because you want to bail them out of a financial jam," says O'Malley. If that's the case, O'Malley suggests helping a parent find a job with another company or providing personal financial support outside the domain of the business.
  • What is the history of your relationship with your parent? It should be one of mutual respect and easy communication. The best situation is one in which the parent has relinquished the role of mentor/teacher/critic and thinks of you as a peer.
  • What do you need to discuss beforehand? You must be able to discuss the scope of the job the parent will be doing, his or her responsibilities, the salary, reporting arrangements, how you will handle a situation when you have to tell a parent what to do, and what to do if a parent starts acting more like the boss than an employee.
  • Can you structure the job so it works best for your parent and for you? "Hiring a parent as a consultant who has the experience and expertise you need has the greatest possibility for success," says Brown. That's because with their limited duties, like writing a sales manual or trouble-shooting, and limited time frames, consultants don't turn the power relationship between parent and child completely on its head the way employment does.

The consulting option also takes into consideration that a parent may not want to work full time. Part-time and off-site work are other creative options when hiring parents. One writer, for example, employs her homebound father, a former research scientist, to scour publications for her; he mails her clippings weekly.

  • Will you be able to evaluate your parent as an employee and, if necessary, end the business relationship without damaging the personal relationship? Before employment begins, agree to evaluate the arrangement within a reasonable time in the near future to see what is working, what isn't, how the business relationship can be improved and whether it should be terminated. If the trial period works out, then you can move to a long-term commitment.

If you can't answer these questions positively, proceed no further. As great an idea as hiring your parents may seem, it is difficult to overcome the psychological hurdles of this topsy-turvy relationship. And if it's going to jeopardize your personal relationship, it's not worth doing.

Contact Sources

Fredda Herz Brown, c/o The Metropolitan Group, 230 Ft. Lee Rd., Leonia, NJ 07605, (201) 461-7352;

Michael O'Malley, c/o Family Business Dynamics, 2102 N. Clifton, Chicago, IL 60614,(312) 477-0247;

Television City, 64 W. 50th St., New York, NY 10112, (212) 246-4234.