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Most 30-year-olds who have spent the better part of their adult lives trying to break free of their parents would not choose a parent as a business partner. And most 60-year-olds would pale at the thought of risking time, energy, capital and perhaps a relationship to go into business with an adult child.
But these unorthodox family business start-ups seem to be springing up more frequently, says Paul Karofsky, director of Northeastern University's Center for Family Business in Boston. What tempts different generations to become business partners?
- Upheaval in the work force--career changes, downsizing, work dissatisfaction and early retirement--means the careers of young adults and their parents are often at a crossroads at the same time.
*Many people in their 50s and 60s are looking for new challenges or ways to focus on one area of interest and shed other, less appealing responsibilities.
- People in their 20s and 30s may be disenchanted by corporate America and feel working for others is no more secure than owning a business.
- People in their 50s and 60s may bring capital and experience to a partnership; people in their 20s and 30s may bring enthusiasm, energy and an understanding of current markets.
All these reasons run through the stories of parent-child start-ups. Sidney Greenleaf, for example, had owned a mechanical engineering business but was looking for a change. So starting a new firm in Boston, Architectural Engineers Inc., with his daughter Robin and her husband, Joel Goodmonson--both structural engineers--seemed to be a perfect opportunity.
When Beatriz T. Halbert wanted to start her facilities maintenance firm, The Sequoia Group Inc., in Atlanta, she asked her mother, Beatriz E. Suarez, to be her partner because "she was the perfect person and this was the perfect time." Suarez's husband, Ernesto, was retiring, and the couple wanted to get away from Michigan's cold winters. Suarez had been thinking of going back to college for another degree, "but this was a much more inter-esting opportunity," she says.
Gregg Levin told his parents and siblings he had an invention he wanted to bring to the marketplace--a gizmo for curving, storing, displaying, transporting and washing baseball caps. "I humored him at first," recalls his attorney father, Barry, who had always dreamed of going into business with one of his children--something other than the law, which he no longer found satisfying. "But he dragged me to stores, and I began to see the gizmo's value." Now Gregg and Barry are partners in Perfect Curve Inc.
Partners, Not Parents
"One of the major advantages of starting a business with a parent, as opposed to entering an existing family business, is that the older generation doesn't hold the `I know better' stick," says Fredda Herz Brown, managing partner of The Metropolitan Group LLC, a Leonia, New Jersey, family business consulting firm. As partners, both parent and child are expected to bring something of value--experience, contacts, skills, savvy--to the company.
For Karofsky, that "something" should also include money, which symbolizes shared risk. "If the parent brings money, the adult child should also make a financial contri-bution--though it needn't be an equal amount," he says.
Still, it's not always easy to separate the parent from the partner. Especially during difficult times, partners can fall into what Robin Greenleaf calls "automatic default--the way you dealt with conflict with your parents when you were a child." How can you keep the relationship equal?
*Be clear on who brings what to the business. "Not only do parents and adult children need to respect the other's skills, experience and ability, they have to be clear about who is going to do what," says Karofsky.
- Use first names only. Symbolically, "Mom" is a deferential term. "I hate it when Rob tells someone on the phone `My mom will call you back,' " says Joan Fields, who, with her son, founded Synergy Realty Inc., a New York City firm specializing in commercial leasing. "When we're at work, we're both executives. I don't think of myself as Rob's mother then."
- Talk about difficult subjects. The senior member's retirement may be an issue traditional family businesses like to duck, but in a partnership, it should be clearly defined in a written partnership agreement.
- Minimize start-up risks. Learn as much as you can about business basics before and during a venture's early stages. "Take advantage of courses for entrepreneurs through colleges' continuing education programs and private organizations," says Leo Rogers, director of the George Rothman Institute of Entrepreneurial Studies at Fairleigh Dickinson University in Madison, New Jersey.
Being partners with a parent or adult child can be hard--even impossible--if you don't like and respect each other going in. "But it has enhanced and improved my already good relationship with my father," says Gregg Levin, to which father Barry responds, "It's a ball. It's a treat to think I'll be sharing the next 15 years with Gregg."
Patricia Schiff Estess publishes the newsletter Working Families and is the author of two new books, Managing Alternative Work Arrangements (Crisp Publications) and Money Advice for Your Successful Remarriage (Betterway Press).