5 rules for succeeding in a family business when your mom is your boss

If you work for a family business, you’re not alone. Nearly 60% of employees around the world work at family-owned businesses. Such enterprises, McKinsey & Company note, thrive because they are “adaptable and resilient.”  

One set of employees faces a specific set of opportunities and challenges. These are the children of the owner. While there are, of course, undeniable privileges that can come with working for a family member, there are also certain difficulties; and children will confront bigger ones as the business transfers to the next generation.

My son, Bart Egnal, and I have encountered all those concerns. He is now the CEO and owner of the Humphrey Group, the company I founded 37 years ago. I interviewed Bart to get his perspective on this experience.

He suggested five rules to turn potential challenges into win-win solutions:

1. Recognize that at work, your parent is the boss

To begin with, realize that the parent you work for is the boss. That’s a relationship that might be hard to accept. Typically, parents are there to nurture their children, even as the child becomes older and more independent. Eventually, interactions are more like those between equals. But businesses don’t work that way.

Bart, who began working for me fresh out of university, says that “no matter how benign the relationship is, as the owner of the business, the parent has to put the long-term interest of the business first. That can create two different and conflicting relationships.”

Bart reminds me that, at one point, I said he could run the business for a few months. But then I pulled back when I felt the company was facing challenges I could best solve. My concern for the success of the Humphrey Group had to take precedence.

2. Commit to learning and hard work

Bart emphasizes that if you want to succeed in a family-owned company and possibly take over eventually, you must commit to hard work, expanding your skills and learning as much about the business as you possibly can.

“All you can control is your own work ethic. So, work hard and learn,” says Bart. “Doing so will give you some autonomy so you can decide whether you are just doing this as a [child] or you are in the business because you are good at this.”

Bart says, “I found early on that I enjoyed the coaching and training that our company is famous for. And eventually, I learned to sell. That mastery allowed me to develop my own confidence and appreciation for the business.”

3. Avoid complacency

Don’t assume that because you’re a member of the family, you’ll get a free ride in the business.

Family members do get plenty of perks. They are unlikely to be fired and often receive higher salaries than they might get elsewhere. But, over time, Bart says, “these perks may lead to complacency. And that complacency may turn into a feeling of being trapped or stuck.”

“It’s important to test the waters outside your family business,” says Bart. “Four years into my employment with my mom, I explored other possibilities and even received an offer from one company. I was proud of this offer. It validated me and showed me I had marketable value.”

“What did my mom as owner and CEO do? She didn’t want to lose me, so she gave me a significant raise. I saw the potential to grow with the Humphrey Group. I then chose to stay, resulting in higher engagement and confidence.”

4. Start succession planning early

For offspring hoping to take over one day, start the conversation early.

Bart was proactive in this dialogue, and very properly so. After seven years of working for the Humphrey Group, he developed a business plan that would prove his readiness to eventually run the business. While we had plenty of international business, we had only one Canadian office, in Toronto. His plan involved setting up offices in two more Canadian cities: Calgary and Vancouver.

It took several attempts on his part to convince me that this expansion was a good idea. The plan we agreed to became an important first step toward his eventual ownership. He received the authority to hire teams in these two cities, setting their pay, and overseeing the business.

Significantly, we spelled out the terms clearly in writing. It might be tempting in dealing with a family member to just have verbal agreements. But that won’t serve either party well.

5. Gaining ownership can be tough

Finally, both parties involved in the sale of the business must have the grit for what can be a difficult set of negotiations.

Bart reflects on those dealings: “I saw that my mom wanted to maximize her sale price, even if that meant my having [to leverage] myself up with debt to buy the business. Objectively, this made sense, but when it’s your own mother doing it, it’s tough to handle,” he says. “Still, I wanted 100% ownership, and if you want that, you have to be prepared to pay. The good news is that after taking this journey together, we are now closer than ever. Sometimes, the most rewarding things are the toughest.”

Bart’s advice to others is to be prepared for some challenges along the way. “There are no easy answers in a family business. Expect challenging moments. But if both sides handle dealings with an element of grace, the result is financial benefits for all and still stronger family ties.”