Entrepreneurs Face “Field of Dreams”

Entrepreneurs Face “Field of Dreams”

Family Business Forum News
by Jim Klaes

Rieva Lesonsky, Editor in Chief of Entrepreneur Magazine, spoke to members of the UTEP Family Business Forum about her own personal experiences growing up amid two family businesses during a luncheon address at the El Paso Club on Friday, March 10.

Ms. Lesonsky, who was appointed to the Small Business Administration’s National Advisory Council in 1994, has been associated with all types of business–family and otherwise–during the course of more than a dozen years with Entrepreneur.She also is a frequent guest on national television shows, such as “Oprah,” speaking about a variety of topics such as women in business and family business.

Lesonsky told how growing up in the world of family business differs from the real world.”I never heard of working 9 to 5 until I was almost out of high school,” she related.”I thought all dads worked on Saturdays.”Her father and one grandfather owned a men’s clothing store, while her other grandfather owned a liquor store with her uncle.Both businesses, however, failed.

“Unfortunately, there are not isolated instances,” she told the audience.”Statistics compiled at MIT showed the average life expectancy of family-owned businesses is about 24 years.Only about 30% of family businesses successfully pass down to the owner/founder’s children.”

This is not to suggest that family business ownership is a fleeting segment of U.S. business culture.”Actually, I was surprised to learn that 90% of all U.S. businesses are owned or controlled by families,” Lesonsky said.”These businesses, ranging from mom and pop shops to billion dollar conglomerates, generate more than 50% of the U.S. Gross Domestic Product and employ about 50% of all American workers.”

But while being part of a family business can mean a person is doubly blessed, it can also be a double curse.”One of the biggest problems occurs when the kids join up,” she said.”From the parent’s perspective, the kid is green, is there to learn and should keep his or her mouth shut.The younger generation, or course, has different ideas.They want to learn, of course, but often feel they have something to add.And frequently they’re right.”

She urged parents to head off the problem by making children work elsewhere for several years before joining the family firm.In this way, the children have an understanding of business realities and their own experiences to draw upon.

“Once you are in business with your child,” Lesonsky cautioned, “make sure you give them a fair hearing.Treat their ideas as you would that of any respected employee.Take advantage of what your child has learned from school or on-the-job.Just because you’ve always done it one way doesn’t mean that’s the best way to do it.Give your child room to fail.No one can learn, no one can grow, no one can prosper unless they’re allowed to fail.”

This does not mean parents should leave their kids alone; everybody needs feedback.But telling them “that’s wrong” won’t help anybody.Experts recommend a 4-step process for proper parental feedback:

  1. clearly identify the problem without assessing blame,  
  2. point out the consequences of their action,  
  3. explain calmly how this action makes you feel, and…  
  4. specify what you would like your child to do about it or what you plan to do about it.

“The reason so few family businesses pass down to the children,” Lesonsky added, “is that the family business is perceived as being too much of an all-consuming lifetime commitment and the younger generation is not able to do that at such a tender age.”

Researchers at Entrepreneur Magazine discovered other reasons, as well.Children feel they won’t be able to establish their own identity in the family enterprise.They lack confidence in their own abilities, feeling they will never match up to the parent’s accomplishments.If more than one child is involved, many fear becoming trapped in childhood sibling behavior patterns.Many think the business will always be there to provide for them, whether or not they join.And, finally, some of them simply have no interest in the business.

Another problem occurs after the child joins the business, or takes over command.Lesonsky spoke of a friend who took over his parent’s printing business.After eleven years, he re-examined his life and became disappointed.He felt he had nothing to show for all his hard work because he didn’t START the business.He ignored his own accomplishments: the fact that he had not only grown the printing business but had steered it through a complete evolution in the printing industry.He gave himself no credit for increasing sales, for automating, and for surviving an industry shakedown…all because he didn’t START the company.He felt left out of the entrepreneurial revolution.

“But he was wrong,” she said.”He IS an entrepreneur because they do more than just start the businesses…they also grow them.Sure the founding family member was an entrepreneur because he or she recognized the wisdom of General Patton’s words: ‘Opportunities do not come to those who wait; they are captured by those who attack.’But second and even third generation family members can be risk-takers too, because it is risky to take a business that is successful and make changes.The status quo is a dangerous place to be.Even if you’re on the right track, you’ll get run over if you just sit there.”

She also reported that many people look at the long hours entrepreneurs work, the high costs they pay, the risks they take and think that they are “driven.”And they’re right!”What you’re driven by is the dream, the all-important dream,” Lesonsky said.”You can’t become a doer without first being a dreamer.Dreams are what push us to succeed, beyond the realm of the possible.”

“Without dreamers there would be no computers, no automobiles, no airplanes, phones or electric lighting,” she continued.”Without dreams there would be no point.So don’t let anyone, ever, discourage your dreams.Like Ray Kinsella in the movie ‘Field of Dreams,’ the entrepreneur is not sure why he does it but, each time he hears the voice, he is driven into action.”

Entrepreneurs often encounter disbelief, and sometimes ridicule.But they are also a different breed.They march to the beat of a different drummer.Lesonsky then paraphrased the great philosopher George Bernard Shaw: Others see things and say, ‘why?’; while entrepreneurs dream things that never were and say, ‘why not?’

In conclusion, Lesonsky told her rapt listeners, “If you’ve come this far…whether you’re a founder or not…then that entrepreneurial credo of sorts…remember that if you believe and if you persist, all things are possible.”