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The family business.... Who started out working for dad here?

Houndogforever

Hot Rolled
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Oct 20, 2015
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I'm 53, learned how to machine in high school, started working for dad at age 18. Never worked anywhere else other than a couple restaurants during high school. Dad also was never a machinist, so I'm pretty much self taught.

Last week, my 26 year old son said, "dad, I want to sit down and talk to you about the family business. I'm getting tired of all the crap working in the hotel industry". Well, that day is this week on Wednesday.

The thing is, he has never been mechanical, doesn't work on cars, never came to the shop to make a widget or some project, just never real interested in it. I have no idea if he has mechanical ability or not, even tho I know he has minimal experience.

Buying out my father led to some .... issues. Being responsible for my father and mother's retirement was stressful. Renegotiating the deal a couple times over the years, finally paid off around 2007 and all mine. 17 years of payments to do it for me.

I'm not sure I want to put that pressure on my son to succeed or it is my well being. On the other hand, it could work out great, allow me to bring him in slowly and get out in 14 years when I'm 67. Heck I"m going to suggest he go take a year's worth of community college machining and cad classes to see if he likes it or not.

I also work by myself, no employees so hiring him on as an employee opens all kinds of issues. Workers comp, my 100% no cap 401k match for retirement :cool: not to mention I would also be responsible for his finances. Not sure what he makes, but I can't just slice $40k off the shop and hand it to him each year so he is comfy.

Just wondering what you guy's thoughts are on buying out dad, kids working for you etc.
thanks for your input.
 
When i did my trade, there were two bosses sons working in the shop, both had been put through as apprentices.

One was a total ass kissing and trendy dude who could not machine / fit anything or even cared a toss about the work yet he got paid and all the perks. Total waste of space.

Other was a competent machinist who got babied a lot.

Boss couldn't seperate the chaff from the hay so to speak as he was blinded by his "good" sons.

The time i was there ten employees including apprentices above me where fired in 4 years....so it was hard for me i learnt a lot but hard to do.
Both dumped him and didn't take over the shop at his retirement age.

So i see it some, firstly the person cannot be babied you have to be realistic the person has to want to do it, want to advance his skills, have the ability to gain skills, put his own money down, if he does not have either sell the shop to someone competent and stop kidding yourself.

They will only run it into the ground no one will work for them .....


They have to find a spot they enjoy and are good at so some trials of various things must be done if possible, sort it out now before your retirement age, every one is different so will have different abilities.

for instance he may like to be a Engineer / Accountant / CAD drafter / Doctor / Nurse / etc Spend the year or so to find out .
 
Well I started out working for my dad. He owns a restaurant. Not a machinist. I was ten years old the first time I worked for him and did it until I graduated high school. I could have stayed there and taken it over when he retired. My heart wasn't in it though. He works long hours. Never has a weekend off. Deals with people that will say anything to get a free meal. Some said I was stupid for not doing it. I could have had it made. They dont know the restaurant business. My dad does it because he loves serving his customers. Going table to table with a coffee pitcher and making small talk. It s what he's always loved. I believe that to be why he is so successful at it. I don't think I could run it as good as he did. My heart just isn't in it. If I was only there for the paycheck. It would show. I am a machinist. I'm into muscle cars, motorcycles, big trucks and boats. I love everything mechanical. Fixing it. Modifying it. Restoring it. It's what I love and that's why I do it.
 
This is a common sentiment in peoples' mid 20s. "I'm getting tired of all the crap working in the ________ industry." They've been in a job long enough that they can't rise further on pure "Show up and be literate" and even if they're really good their growth trajectory is starting to flatten. Bellhop to night manager is probably a pretty easy climb. Night manager to manager is hard, and climbing further is brutally hard. The higher one climbs the more crap they have to deal with for rewards that become ever-decreasing relative to amount of additional effort exerted.

The sad fact of the matter, though, is that there's the same crap everywhere. Best bet is to find an industry whose crap you don't mind the smell of, and I'd lay pretty good money that small machine shop isn't going to be that for him. If it was going to be, he would already be there.

Work, even work you love, is a grind. That's why you get paid to do it.
 
I've been working for my ol man for the last 10 years or so.

Just treat him as you would any other employee. You'll know in a few years if he's cut out for it. Then in another decade he can start talking about buying you out.

Seems a bit early to start thinking about buyouts, before ever making a chip?

Being that he wants "to sit down and talk to you about the family business" I have a feeling he has some grand plans he wants to run by you.

I've been there. Don't shut it down too hard. Discuss it with him, even if you think its completely out there.
 
My experience with second/third/etc generation businesses is mostly with farming. I have an irrational, pure, hatred for it. I can't explain why, mostly it's jealousy.
 
Before you discuss bringing him onto your payroll, ask yourself "Do I have the ambition to increase my business by $200,000 per year to be able to feed another mouth?"

As far as family businesses, I will guess there are far more that are a millstone around the neck of the next generation than ones that are a life preserver.
 
it's always a good thing to take time to listen to your son. Start by doing just that, listen. Open ended question to him, "what's on your mind","what do you want to do about it", "how do you see it work better for you and for me"?
 
If you do not have the work load to justify another employee than that makes the conversation short.

He can however intern for some pocket change meaning you have no job available but can provide some work to allow SOME exposure to what it is that you do.

Advise him to NOT quit existing job as you do not have the ability to provide one but that you can provide a few hours here and there for him to do some "helper tasks" to free up your time and give some exposure.

From that experience yiu both can learn if there is any future in his wish to do what yiu do either with yiu or looking for other employment while not having pressures due to maintaining current employment.

Sent from my SAMSUNG-SGH-I337Z using Tapatalk
 
I started out working for my Dad in his machine shop. It's a small shop that has had between 1-5 employees over the years. I received my first official paycheck when I was 13. I started working for him full time after college at age 22. I'm 36 now, and I officially took over ownership of the shop this past September. (On a buyout plan.) It's worked out well for both of us.

Over the years my Dad gave me more and more responsibility. For the past 5 years, I basically handled all of the administrative responsibilities except for depositing checks paying the bills, so I knew what I was getting into when I purchased the business. So far, things have worked out well for both of us. My Dad will get more out of the business than if he had sold it to a stranger. It's worth more to me because of the relationships that I have with the customers and the shop is already set up for how I do things. To someone else, it's not worth much more than the value of the equipment and tooling. I also get a generous payoff plan which my Dad would have never given to someone else. If I was starting from scratch, I wouldn't be able to afford a shop that was this well-equipped.

My Dad is still working, just not for me directly. He set up a machine shop in his poll barn, and I sub out work to him. That arrangement has worked out well. He takes as much work as he wants to do, and I don't have to mess around with as many of the low volume jobs. I also don't have him looking over my shoulder saying "that's not how I would have done it." Not that he was too bad about that, but he is still my dad after all.

I think the biggest reason that this arrangement has worked out well, is that my Dad and I get along well and we trust each other. If you don't have those two things, it will not go well for you and your kids. I've seen that happen more than once.
 
Let him get a job in the bussiness somewhere else first
So he can learn a few things
And he can help you out in his spare time now and then
Also let him have some classes So he gets a feeling for it and sees if he likes it
How are you getting along when working together ???

Peter
 
I'm not going to lie, I'm a little shocked to hear that some of you guys had to buy the business from your fathers. I would never even consider selling my business to my son (or daughter?). If he wanted the business, he can have it when I retire. Lets be honest, it's almost impossible to sell a small company for a reasonable amount of money these days. If he didn't want it, I doubt I would be able to sell it for much more than the equipment is worth and I'm not going to take advantage of my son to try and sell the company to him so I can retire in comfort. Idk I guess everyone's different. My dad started a window cleaning company and if I decided to stay in that trade to take over the company for him, I think I would be offended if he tried to sell me the company. I would rather start my kid off with a head start in ownership and live in a little less comfort than sell the business to him.
 
I'm not going to lie, I'm a little shocked to hear that some of you guys had to buy the business from your fathers. I would never even consider selling my business to my son (or daughter?). If he wanted the business, he can have it when I retire. Lets be honest, it's almost impossible to sell a small company for a reasonable amount of money these days. If he didn't want it, I doubt I would be able to sell it for much more than the equipment is worth and I'm not going to take advantage of my son to try and sell the company to him so I can retire in comfort. Idk I guess everyone's different. My dad started a window cleaning company and if I decided to stay in that trade to take over the company for him, I think I would be offended if he tried to sell me the company. I would rather start my kid off with a head start in ownership and live in a little less comfort than sell the business to him.

This is where I'm at exactly. If my son had any interest at all in anything I was doing that alone would be worth it.
 
Originally Posted by Econdron View Post
I'm not going to lie, I'm a little shocked to hear that some of you guys had to buy the business from your fathers. I would never even consider selling my business to my son (or daughter?). If he wanted the business, he can have it when I retire. Lets be honest, it's almost impossible to sell a small company for a reasonable amount of money these days. If he didn't want it, I doubt I would be able to sell it for much more than the equipment is worth and I'm not going to take advantage of my son to try and sell the company to him so I can retire in comfort. Idk I guess everyone's different. My dad started a window cleaning company and if I decided to stay in that trade to take over the company for him, I think I would be offended if he tried to sell me the company. I would rather start my kid off with a head start in ownership and live in a little less comfort than sell the business to him.

This is where I'm at exactly. If my son had any interest at all in anything I was doing that alone would be worth it.

I think every business is unique. And every market location is somewhat unique. It's hard to compare a 1 man shop in a rural area serving mostly farmers to a higher volume shop in a port city mostly serving the marine repair sector. Or a shop in Houston serving the oil sector.
 
I'm not going to lie, I'm a little shocked to hear that some of you guys had to buy the business from your fathers. I would never even consider selling my business to my son (or daughter?). If he wanted the business, he can have it when I retire. Lets be honest, it's almost impossible to sell a small company for a reasonable amount of money these days. If he didn't want it, I doubt I would be able to sell it for much more than the equipment is worth and I'm not going to take advantage of my son to try and sell the company to him so I can retire in comfort. Idk I guess everyone's different. My dad started a window cleaning company and if I decided to stay in that trade to take over the company for him, I think I would be offended if he tried to sell me the company. I would rather start my kid off with a head start in ownership and live in a little less comfort than sell the business to him.

Legally over here at least for tax reasons you more or less have to sell it to em! I worked for - with my dad from circa 10 ish, part time doing custom high end wood work. (yeah started on the broom handle, but then progressed fast once i could reach things!) Made significant money as a 12-15 year old too doing this, learnt a lot.

IMHO he may well bring some new approaches to things too, yeah its a different industry, but sales and such in the hotel games bloody hard, things have to be right all the time for thoes sorta places to just keep running at break even.

Make it clear to him the problems it will cause you, how thoes extra costs have gotta be covered by his increased sales - output. Give him time to think, hell give him a trial whilst hes on holiday from the hotel game. Maybe make him make the position part time then gradual become more hours wise till its a side ways move for him and hes not leaving you a void financially. IE don't just give him a job, give him a rope and see if he can do something with it!

Selling the buis to him is a long term problem light years away, your 53 he has 7 years till your even 60. Sounds like you are not reliaing on the sale of your multi million pound self employed venture to fund a tropical retirement either + you won't have the same mistakes to make as you did from your old folks.
 
If he hasn't been drooling over your machines since the age of 2, sneaking out to try to run/figure them out, and waiting for an opportunity to learn, I'd say no way:

for his own good
for your own good
for your relationships own good.

The only exception to that is if he is one helluva kickass salesman and can bring the work to the shop, and have someone else do the work. Seriously I don't think he has any business or real interest in this work if he has never had any interest in things mechanical or just how stuff works. If you, yourself can't cite any mechanical aptitude in him, then it isn't there, and it isn't the kind of thing that can be taught at 26. Your brain starts to work that way at the age of 5-12 as far as I'm concerned and if you aren't doing it then, you probably never will very effectively.

I could be wrong - there could be some latent talent there like some folks find later in life but those talents are usually because they are introduced to something later on that they had no previous exposure to (I've known several outstanding musicians like this). In your case, he has to have known what it is you do for a long time and has shown no interest - because he has none. That isn't meant to be mean, just the facts. His interests lie elsewhere and he needs to figure out where.

Just an opinion of course..

Brent
 
I think this is a difficult topic for most family owned business.

My dad hired me (he asked me to come to work for him while I was gainfully employed as a mechanic) and I left a job around 1984 to go work for him. He didn't ask me what I was being paid at the dealership where I worked and I remember getting my first paycheck for roughly 35% less than I had been making. I talked to him about it and he said that he didn't want the other employees to think that I was born with a silver spoon in my mouth. That got us off to a rough start. I worked for him for two years - all good experience with respect to what I learned. He owned Pacific Industrial Supply in Seattle and I traveled some to various auctions around the country with the responsibility to keep track of everything he purchased and make sure it got loaded onto trucks and shipped back to Seattle. There were auctions where I had to load out a dozen semi trucks over 2 or 3 days. There was one package deal he bought that took 30 days and over 75 semi loads for me to get loaded, secured and shipped.

After two years of that and me finding the most satisfaction putting "packages" together for customers (hydraulic power units with a hoist and jib crane for instance) my dad told me to stop "engineering shit" for customers and just sell stuff as it was. This along with the constant tension of seeing him be too cozy with other women when we were at auctions out of town, hearing about all the crap that the other owners did while still making less than I had made as a mechanic and I decided I wanted nothing to do with his business so I quit and applied to the University of Washington and earned a degree in Engineering. He labeled me a quitter and let me know that I would never finish anything . . . not exactly the most inspirational conversation, but it did motivate me to work hard in school, pay my own way and prove to him he was wrong.

Fast forward a few decades and I realize now that a lot of how I have structured my business is based on the lessons learned about how my dad ran his business (i.e. what not to do) . . . and my first few engineering jobs have had a similar impact on how I structure my business for both good things to copy and bad things to avoid.

In every case I have encountered - I have learned that decisions about hiring / ownership in any business should be based on values, aptitude, skill, and character - NOT DNA . . . I am glad I worked for my dad for the time I did. I wish we could have had a better relationship, (we had dramatically different values as he was much different at home than he was at work). Mixing family and business in the context of most dysfunctional families (and we are all dysfunctional to some degree) is a recipe for disaster unless you have alignment with respect to the non-negotiables (which are true for every hire you make whether family or not).
 
If you're truly interested in having him in your shop, set up (or have him setup) an LLC for him. XYZ Widget Co LLC. Pay him as a subcontractor to work for you. You don't have to keep him on your payroll, pay payroll taxes, workers comp or benefits. This will also allow him to gain some responsibility in managing his own money and paying his own taxes. If in a decade you decide to hand over the reins, he should be able to manage fairly well with all aspects of the business.

Honestly, I think it would behoove more family owned businesses to operate like this.
 
Better check on the legalities of this if he is working in your building, on your machines, doing your work, and you are setting the work schedule.

Econdron, if you're truly interested in having him in your shop, set up (or have him setup) an LLC for him. XYZ Widget Co LLC. Pay him as a subcontractor to work for you. You don't have to keep him on your payroll, pay payroll taxes, workers comp or benefits. This will also allow him to gain some responsibility in managing his own money and paying his own taxes. If in a decade you decide to hand over the reins, he should be able to manage fairly well with all aspects of the business.

Honestly, I think it would behoove more family owned businesses to operate like this.
 
Better check on the legalities of this if he is working in your building, on your machines, doing your work, and you are setting the work schedule.

The only issue with having contract labor is you can't set the schedule. Not that the DOL has to know that anyways. Hopefully a son wouldn't nark on his dad. They are more than welcome to use your equipment at your facility. Having to set up the individual business entity is key. Around here, you can't just pay contract labor without paying a different company for the work.
 








 
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