Uh, Mom? Dad? Can We Talk?
Suddenly, joining the family business is starting to look a little more attractive. Of course, there are some potential pitfalls.
Good Morning!
Here are today’s highlights:
The owner of a family-owned footwear company says the trade war is a “gun to the head of all the American businesses like mine.”
Gene Marks suggests some ways that businesses can try to mitigate the impact of the tariffs.
The latest University of Michigan consumer-sentiment index finds consumers are “petrified.”
A retailer’s dilemma: Should I be buying more or less?
FAMILY BUSINESS
Some see a generational shift at family-owned businesses: “A young generation is taking a bigger interest in joining the family business, spurred by a cooling labor market that is making it more difficult to land entry-level jobs, economists and business analysts say. At the same time, their parents and grandparents—Baby Boomers and Gen Xers who own the vast majority of America’s businesses—are feeling more urgency about making succession plans as they look toward retirement. The share of small businesses that employ a young adult child of an owner has doubled since 2018 and is up 13 percent year-over-year as of January to roughly 1,200, according to an analysis by payroll provider Gusto.”
“The company analyzed 400,000 payrolls searching for companies where the last name of an owner over 50 years old matched the name of an employee under 30. The analysis purposely excluded 100 of the most common names in the U.S. It is still a small share of small-business owners who employ their children, said Gusto economist Nich Tremper: ‘But that movement is significant.’”
“Mark Valentino, the head of business banking at Citizens, sees this moment as a reversal from recent decades in which the children of business owners tended to stigmatize returning to the family firm in favor of striking out on their own. ‘For the first time in a generation, there’s more excitement and interest in taking over a business that already exists,’ Valentino said.”
“For many, that interest is driven by economic realities. Covid upended the career paths of many young people, then a boom in artificial intelligence and more recent trade war unease began reshaping the entry-level job market.”
“Family business strategist Gary Plaster of the Fairhope Group said he has been seeing more of his clients hire their children in the hopes of passing their companies onto them. While it sometimes works out, he said, there are pitfalls. Young family members who haven’t worked in the business before may be entering it as young adults without training or experience. ‘What’s happening seems like it’s better for the kids than it is for the business,’ Plaster said.” READ MORE
