Should You Join your Family Business or Start A Separate Career? | Part 1 of 2
Taking the easy way out?
Many of us might have the opportunity of joining family businesses started by our parents or relatives. Young graduates from business families often face a dilemma - should you apply for a job and get exposed to an uncertain world? Or simply join in the readymade family firm and continue the legacy? It certainly might seem easier to have a career waiting for you without having to struggle to build one, but is taking the easy road better than gaining real-world entrepreneurial experience on our own?
Many of today's most successful business leaders have achieved a great deal of success by joining their own family business and then taking it to the next level. In episode 1 of the Leadership Speaks series, we heard Abhishek Somany, MD Somany Ceramics talk about his own journey and challenges after taking over a family business unit and going on to make it a hugely successful global entity. In Mr.Somany's case, it was taken for granted that when he completed his education, he would join the family business, but nowadays, young graduates have many alternative career choices available to them that earlier generations did not have. Making a choice to join a family business or branch out into our own career could be a truly life changing decision.
What it means to join a family business
Data shows that family owned businesses are more innovative and robust than what many people might think
Becoming part of the business family usually means joining a family office, which is managing a smaller part of the family business along with your parent/relatives who will occupy the chief role. This is an option open usually for younger members of the family who get access to the family firm and the family capital to invest early on in life. This will present unique opportunities to learn the tricks of business and apply it to running your own family business. One of the reasons young people join family businesses is because of the advantages, opportunities, flexibility, and the support of their older family members.
The chances of joining a family firm are considerably higher in Asia, because of the high number of business families in the region, and in India in particular. According to a report by Economic Times, India ranks 3rd globally in terms of number of family-owned businesses. The report also mentions that family-owned businesses continue to outperform their peers in every region and sector of any size, attributing the cause to be
Having a longer-term outlook as compared to other businesses
Less dependence on external funding,
Higher investment set aside for research and development.
Family-owned businesses seem to be more innovative and robust than what many people might think.
However, while it might seem very easy to have career waiting for you straight out of school, it takes guts to choose to work with your family business. The need is to balance work and family life. Working closely each day with a parent, facing the stress of both business and family in office and at home might be a discouraging thought, leaving some of us with a sense of being trapped.
Reasons to consider starting your own career
A common risk of joining a family business at an early age is that once you join, it's difficult to leave it or change your career if you lose interest. The dilemma facing young people who do not have much career experience is that many of us may not yet know what we are good at, or which type of role or career we are most interested in. That's why, many graduates who join a particular industry right out of college would soon end up leaving it and completely changing their career paths within a few years. In family businesses, there is no clear exit plan, and very limited options to change one's area of interest later. For young people who have not yet fully experienced the world and have no entrepreneurial experience, this might be a major hurdle to choosing a ready role set-up by someone else in the family.
The ideal scenario is to join a company with a clear purpose and growth strategy that matches your own. Doing something you love and enjoy being part of can make you much more motivated and successful.
Gaining career and entrepreneurial experience before joining a family business
A commonly pursued option by many business families is for their young entrants to gain career and entrepreneurial experience outside before joining the family businessHaving some early career experience allows you to make a more informed decision about whether to join a family business or not. For example, doing a short-term apprenticeship in another company or industry, working with clients as a junior member, learning how to sell, meeting new people, dealing with senior officers, understanding competitors - can give invaluable insight and experience you could not have gained working with your parents or relatives.
In many family businesses, gaining outside experience for up to 5 years before joining is mandatory. This not only helps gain broader perspective on business but achieving entrepreneurial experience independently outside before taking on a family business role helps greatly in getting the respect of your subordinates and workers. Not everyone gets a golden ticket straight into a family business.
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Many of India's next generation business leaders join at lower positions in their own family business so as to gain experience and to understand how their other departments / factories function. This can provide invaluable experience, as well as make them more sensitive to issues and perceptions at other levels, which the senior management level may not get sufficient exposure to.
In many family businesses, outside experience or a lower-rung placement for up to 5 years is considered mandatory before taking on a senior position
Family Capital For Investment - Entrepreneurial Experience Funded By Family Money
Many young graduates might think that instead of joining the family business, they would prefer taking family capital and starting their own independent business as an entrepreneur. Surely, starting a new career rather than joining a family business gives you much more flexibility. However, Independent entrepreneurs face great business risks with high chance of failure. It requires one to take calculated risks and be ready to pursue a dream. Family businesses and access to capital gives us opportunities to get business experience to a far greater extent than we could expect with other options. Startups have a comparatively easier growth path when they involve family members. The support of a family business can allow entrepreneurs and startups to face early setbacks and to bounce back where others might fail.
Sunil Vachani of Dixon Technologies is an inspiring example of the successful use of family capital to create an independent startup that he grew to a multi-billion dollar giant.
In his early 20's, Mr.Vachani borrowed Rs.20 lakh from his father to setup Dixon Technologies and manufacture TV sets on contract - This was an un-tested business idea at that time and was considered a risky bet. After several years of ups and downs, Dixon Technologies is today India's top Electronics manufacturer worth +2.8 billion dollars.
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