As a business owner what are your thoughts on nepotism?

[ivymeow]

For those who had a career before owning a business, we all have worked in places where nepotism was present. Son of the owner/founder is Exec VP, recent college grad daughter got a shoe in job at a big consulting firm because dad is a partner, brother of the owner coasts on a easy six figure salary. As a young employee I used to be like "man F' that guy! he's only in that position because of his dad!" On the outside this is most peoples view on nepotism.

But not every nepo hire is a terrible hire where spoiled brat son just mooches off daddys success. I know a guy that took over his dads Govt Contracting business and scaled it from 6 figures to 9 figures. His dad was moreso the owner/operator where son focused on scaling as an owner and going after more business vs spending time working in the business. There are nepo hires that work EXTREMELY hard.

As a dad and business owner, I'd love to be in a position to pass down my business to my children....if they work hard to keep it going, scale it, and not just expect it to be a free ride to an easy life. As parents we'd do anything to give a better life to our children. It'd be a dream to see my children scale my business way beyond what I built. But I know that's rare and I'd probably be better off selling my business than risking one of my children tanking it. As fellow business owners what is your take on nepotism?

 

[treyu]

@ivymeow Yeah I joined my family business (after i worked in the corporate world for a handful of years after graduating college) and I lead our sales team after coming in and tripling the sales of the current producers combined.

They were obviously not thrilled that i came in and it revealed how hard they were coasting on us just being established but we have now opened up a second location and brought on a handful of new employees and are really starting to grow our business again.

Nepotism for the sake of nepotism is typically bad but that doesn't always make it so.

 

[hippyhappo]

@treyu Similarly, here, I just joined (partnered) in my Dad's business, after 25 years of my own businesses & consulting experience.

We have more than doubled sales and totally rebranded, and looks like Dad may retire in 2years.

That said I have 3 kids of my own at some time in the distant future if they want to join our firm I will give them a chance to prove themselves and create a spot. They must get “beat up” lol on their own for at least 10 years first though!

Legacy is important, to me, and this would be clear to anyone who works with me.

 

[treyu]

@hippyhappo Absolutely. When i was growing up i wanted nothing to do with the family business lol. My grandfather had started it then my uncle owned it and now my mother. So i'm 3rd generation and it's a great story.

I think one of the reasons I had no interest in the family business is i wanted to make something of myself and not just be one of those kids who come right out of school and go work for mom & dad. I went to private school growing up and there were a lot of kids who were just going to go coast at parent's business after school. the bad kind of nepo lol.

But then i worked in big corporate for a Fortune 100 company as an internal wholesaler in a similar field to my family business and i loved it at first but then the corpo politics came and I wasn't good at kissing ass. I was very good at my job but I didn't just waste my time to placate my management. I had already hit my yearly sales goal in APRIL and they were giving me a talk to about how i wasn't making enough phone calls and zoom meetings and blah blah. Like buddy i thought this was a sales role not a see how many calls i can make in a day and waste my time role. He ended our 1Q review with "No one has ever been fired for meeting metrics but not sales goal however we have fired people for hitting sales but not metrics" and i was like ok yup here's my two weeks and gave up a bunch of money for that year by transferring before my comps paid out but it was so worth it.

I think it takes a certain personality and work ethic to mix family and business but when it works it really is a great experience.

 

[ivymeow]

@treyu

I went to private school growing up and there were a lot of kids who were just going to go coast at parent's business after school. the bad kind of nepo lol.

one of my good friends is a nepo baby but the good kind lol. He introduced me to a friend he went to private school with and owned a bunch of Five Guys franchises in the area. I was like "how the hell does a guy that young own that many franchises?" Then I look him up and his dad is a partner in an ownership group that owns an NBA and NHL team.

 

[denisel]

@treyu Gotta miss ass well to move up

 

[hippyhappo]

@treyu Similar story, but the middle part was my own company, and although I was in a similar type of business, I was in a different industry…an industry I no longer wanted to be a part of.

 

[chillcwill]

@hippyhappo What if they get the full "beat up" treatment in a 3 year time frame? Is that good enough?

 

[mmp13]

@chillcwill 3 years is not near enough flailing

 

[chillcwill]

@mmp13 How would you describe "flailing" in detail for a 10 year time frame?

 

[mmp13]

@chillcwill might go something like this...

Year 1 out of college - "I'm the best! I'm gonna be rich!"

Years 2-3 - "okay so I'm not the best, im not rich, actually, I think my company are laying people off this year. No biggie, I can still make the top 30 under 30 list"

Years 4-5 "so yea, I got laid off but its cool cuz I like my new company and I'm still moving upwards! Gonna be rich baby!"

Years 6-8 "yea, I never did make those top industry lists but I have a little bit of savings" proceeds to get married and have a child oh look, my savings, my social life, and my will to live is all gone, but I'm still renting a 2 bedroom apartment and paying for 3 cell phones.

Years 9-10 "actually yea, this industry has completely changed and the office politics are completely toxic" I just want to be able to pay a mortgage and not have a heart attack.

Year 11 "heading on home to the family business" No politics, no struggling, my family gets a break, and my house and car are paid for. Thanks Dad!

 

[hippyhappo]

@mmp13 Boom… accurate.

 

[sandgroper101]

@treyu There is also a reason a lot of kids get into the same line of work as one of their parents, aside from nepotism. You learn a lot through osmosis, and entrepreneurship is not as scary when you see a family member doing it.

 

[edufacts]

@sandgroper101 It’s funny because people don’t really get up in arms like this when kids who have doctor or lawyer parents become doctors and lawyers.

 

[malu]

@edufacts Difference is, doctors and lawyers don't get handed their qualifications just because their parents are either. They still have to work hard to get to where they are. A nepo baby joining a family business, not so much.

 

[uksimon]

@malu Ehhh, they can get some legs up and into school a little easier, but obviously yea they do still need to do the work.

 

[chavaayanna]

@uksimon Not always, I sell used vintage clothes. You have no idea how many nepo baby vintage clothing stores are open. Some have son owners that I respect and grind, others are obviously just losing businesses. Must be nice to be rolled enough money to afford a store front and blow it all.

 

[engageministries]

@treyu Same here. I recently retired from a career in public safety and now help my aging parents with their retail businesses. Adding a fresh set of ideas and helping them implement future prospects is along with being an advocate for the employees has been helping the organization overall.
It all comes down to the person.

 

[spacecapsule]

@ivymeow Just like every thing there’s good versions and bad.

Honestly there’s a lot to be said for having a leader of a business that’s raised for it( as long as they have the desire). There’s knowledge they absorbed just by being around the “dinner table” that is worth more than any degree they can literally have 20 years of experience at 30.

It’s like my dad was a mechanic and handyman always worked on cars and things in the shop. From the time I was 4-5 I was handing him tools I didn’t go into that line of work but know how to do things on cars and home repairs that quite frankly don’t know where I learned it I just know that’s what you do or that’s how this part works. Imagine having that same instinct for business.

Now the key is properly testing them in other roles or sending them to another company to cut their teeth. Then only then allowing nepotism to place them anything outside of that is bad and probably sets the company up to fail.

 

[ofgodoffspring]

@spacecapsule I think you nailed it. Bad nepotism hires is very obvious and that's why it's easy to think of nepotism being automatically a bad decision. But the truth is significant amount of second generation owners are extremely driven with far more company specific experience than any CEOs they could have ever hired. They just weren't always obvious or weren't talk about much.