How Long Should We Wait for My Dad to Retire from Our Family Label Business?
I’m crushed — my older brother is planning to retire before my dad!
My dad is still active in our label printing and converting business that he started almost 50 years ago. Based on that information, you can guess his age, yet he’s not even close to being retired!
For the past 10 years, my brother, my sister and I have been planning to take over our family business when he steps down. Now, after all the waiting for dad to step aside, my older brother just told us he wants to retire — before my dad!
The three of us kids had such big plans for the company. It looks like we are not going to be able to do that now with my brother retiring. This is a crushing blow. I’m not even sure I want to continue working here if it means reporting to my dad again. Any thoughts?
Disappointment. Frustration. Unfulfilled dreams. Your own timeline. The timelines of others. What you are describing is not uncommon in the family business. Often the founder does not leave completely until he or she passes. Unless a business is sold to an outside party, it’s very difficult for the person who started the company to let go.
From your side, your perception may be that your dad does not trust you and your siblings. This may seem offensive to you or may make you insecure about your ability to take over without your older brother taking the lead.
From your dad’s side, it is hard to let go of something that has been his life’s work. He will judge you more harshly than he would an outsider about your readiness. He needs to believe that you have learned all there is to know.
The first step is to bring in a professional to help with the transition of your brother retiring. This person also may be able to help with some of the other issues you are facing.
For my own family business, we hired a certified family business professional to work with the entire family. That person can do an evaluation and make recommendations. Having a neutral third-party — with none of the family baggage — is important.
In addition I strongly encourage you to hire your own confidential business advisor, someone separate from the other advisors of the company. While these other experts may be excellent in their areas, they are looking out for your father’s interests. You want to be working with someone on your side, who can help you grow, and guide you in crafting a road map for your own future.
Next, look at the skills that your father offers that he could continue to provide. This might be engineering or manufacturing knowledge, financial acumen, or a depth of connections throughout the industry. Rather than having your father be in charge of the entire business, he could drill deep in one area that makes a difference.
For example, in one family business that I worked with, the father became the ambassador of sorts, looking at businesses to tuck in. He worked with my team as we identified and vetted companies to buy. With the assistance of myself and my team, we set up a deal flow program for him, and he met CEO to CEO with owners of complementary businesses. That outside role was helpful to the family, to have him away from the office so they could experience day-to-day management without him looming over them. His knowledge and willingness to learn from us how to buy businesses allowed the business to grow significantly before the children took over. This gave him more security that the business could survive without him. In addition, from a wealth perspective, he was able to increase the valuation of the business, which improved his own situation when he finally retired.
Having your older brother retire will be a disappointment, for sure. Your advisor can help determine which types of responsibilities your brother will have in retirement, how you and your sister can prepare and grow in your new roles, and all the issues related to money. Your brother will probably expect to be compensated, and there will be decisions to be made about that, as well as a discussion about the timeline for your own future retirement.
It’s best to get things in writing. People’s memories of these discussions tend to tilt in their own favor, and you want this to be a family document that everyone agrees upon — or at least a document that everyone is working from. Your family business advisor and a confidential business advisor like myself can guide you and help you with the preparation.
You did not mention your sister’s role in the company, but it is imperative that the two of you work together and gain skills that support and complement each other. When you do run the company together someday, you will need to understand operations, finances, sales, marketing, and much more. This is the time to learn how to read monthly and year-end financial statements. Also, attend board meetings regularly, have a hand in creating the budget, and become comfortable with each of the department heads and their responsibilities, even if it is in areas you do not understand yet. The managers need to learn to trust you and become confident that you are ready to take over when the time comes.
Because your father also needs to trust that you are ready, this time before your brother retires is a golden opportunity. You say you do not want your dad to be your boss anymore. Without your brother in the business, you will be working side-by-side with your dad. It may be hard to believe, but when you look back on your life, you will cherish the time that you worked with your family.
Appreciate every single day that you have with your father. Use this time to talk with him not only about business but his perspectives on life and what he believes is the definition of success.
Let him know you are ready to collaborate and that you are going to take good care of his baby, the business.
If you can’t envision yourself having this type of relationship with your father, lean on your family business expert and your trusted business advisor to guide you. It is an opportunity too good to pass up, and I speak from experience. One of the greatest treasures of my life is my relationship with my own father, which has deepened as we have grown older.
It can feel uncomfortable to bring in an outside expert to discuss these matters. It’s crucial to prepare now, before your brother retires and while your father is still alive. Good luck to you and let me know if I can help.
Resources:
https://www.labelandnarrowweb.com/contents/searchcontent/all/ask+rock/
https://printmediacentr.com/ask-rock-how-do-i-know-which-growth-strategy-to-pursue/
Check out other articles in my #AskRock series for more mini case studies and expert answers for the specialty print and converting industry.