Welcome back to another episode. My name is Purdeep Sangha.

And I'm Harjeet Sangha. And

We are, are the business brothers. I know that sounds so corny. We're kicking it off. We're both laughing here. We're doing our best here guys. So stay stick with us here for a little bit, but today's topic. I think you're going to be really interested in, we're going to be talking about the reasons why the next generation doesn't want to work in the family business and Harj, you sent me a report here recently about family businesses and some of the challenges when it comes to transition. How big is this challenge when it comes to the next generation, not wanting to work in the business?

It's quite large. I think, you know, we can look at it from our own experience, but also look at expanding that subset to the clients that we've helped and work with it. It does come down to some fundamental factors of why they don't want to work in the business. And, and one that comes up very often is just don't freedom. And your business requires a lot of nurturing, a lot of attention. It's twenty four seven. You're answering the phone. Sometimes your home actually might be at your place of business. So there may not be this clear division or separation of your business life and your home life, but to have a successful home life and business life, it need to be able to, to separate them out. And at times integrate where you need to find some synergies, but certainly for the home life piece, the no freedom does have a big impact.

Yeah, I think just to add to that, some of the people that we've talked to base also say that the parents being involved in the, in, in the business just creates that much more strain in terms of feeling controlled, right? It's one thing to work and, and have a tough time with work-life balance. But it's another thing to how a tough time with work-life balance, but also have your parents involved and tell you what to do and treat you like a kid and be like, Hey, do this, or you're doing it wrong. And we know this. Right? Our parents were exact same. I've been driving a tractor since I was ten years old, but every time I would get on one, I dad would still be like, okay, you're not doing it properly. Or mom's like, oh, you're not doing it properly so that you constantly feeling like you're controlled. It's a big challenge. So I, I get that whole freedom aspect because I, I think that's very prevalent out there.

Yeah. It's funny. I was just going for a drive with mom and it's still, you know, she's still navigating you though. She's in the passenger seats, even though that ride and duration of the trip was short. You know, you can only imagine that extrapolated over, you know, seven days a week, multiple hours per day, talking about multiple years here, you know, it, it does come down on you that that weight can be overbearing for sure.

Yeah. Because not only your parents give you input in terms of what to do in business if you're in a family business, but they're also telling you what to do at home too, right? How to raise your family, how to raise your kids? So it just being in that family business and that dynamic just adds on a whole other level or layer of complexity. And so if you're a parent out there gen one of the founding generation listening to this as well, so have some empathy and compassion for your kids because they're, they're feeling a different level of, of experience that, that you are as well. And, and the other thing that pops up for me Harj is this isn't for every business out there. But I think the other thing is a lot of gen two's and the business are gen threes. So this isn't just restricted to gen twos. This might actually be a bigger challenge for gen three and gen four is feeling like they're not making as much money money because they're in the family business. And sometimes family members aren't paid the amount that they should be paid, you know, speaking from experience Harj, you and I, we didn't really expect a wage from our parents working in the orchard. It's not something that we demanded. I don't think my parents even offered it.

Yeah. I think the, the free rent and groceries was implied.

Yeah. Yeah, exactly. But sometimes the generation feels like they're just not going to make as much money as they could working elsewhere. Right. Building a career elsewhere. So I think that's something to keep in mind. What are your thoughts on that heart?

Yeah, I think that's definitely another important factor to, to consider when you look at it in terms of what your expertise is in your family business and kind of what that level of compensation could earn outside the family business. And, and sometimes you may be underpaid in your family business. You know, you could take your talent elsewhere. Is LeBron James a used famously taking his talents to, to south beach. But you know, in, in short perspective of that, Purdeep, you know, there could be other career aspirations that I've had in business that just have higher wages available, which could be a deterrent factor for staying in the, in the family business.

Yeah. That's a really good point because some, someone might have a very specific skillset and it might be worth some more in another industry and another sector, maybe even a different location. Right. That's one of the things that we took a look at too, we grew up in a town where there weren't that many jobs and we had to move away to advance our career. Have we stayed with a family business, right? That would have deterred us from our, even if we were working in another career and still involved in the family business, we probably still wouldn't be making less money. I know you moved from small town to Vancouver because of a higher wage. Right. And because you moved, you couldn't be as active in the family business.

I mean and you know what I think it's good to spread your wings. I forget who coined it, but moving away from your hometown is, is kinda like an early life hack. If you can do that early in your life and, and gain some experience of living away from, from family and friends that you grew up with, you've learned some valuable lessons. There's, there's always an opportunity to come back, but certainly if your business has grounded of where it can be physically, you know that could limit the, kind of, the interest of your, of your next succession plan within a family wanting to stay in the business.

Actually, that's another one, that I see is people just not wanting to stick around in the whether it's a hometown maybe, or maybe it's a town where, like you said, if it's a physical location and you're stuck to it, they just want to move right next gen sometimes just want to explore the world and live in a different city, be a different part of the world, go traveling. So I think that has a an element to it as well. And I think it's healthy to have your kids move out. I think it's healthy for them to go out and explore and experience a world because once they have some more worldly experience, they're going to add that much more value to the family business. If they actually come back to it.

They come back risky.

Yeah. And so are there, are there any other things that you're, you're seeing out there Harj? Yeah. Why

That, you know, I think we can talk about in our own aspect or maybe more towards my aspect is there may not be an interest at that particular time. So we all go through different life stages and, and different cycles. And I know for, for me growing up, you know, as much as I appreciate the outdoors, it wasn't the greatest affinity for me to stay in farming. I, I did like, you know, the pharmaceutical sciences and the business aspect of it, which kind of drew more of my energy and certainly my career aspirations. As you get older, you do appreciate that the things of having a high quality business, being outdoors, being your own boss, but still, you know, it's not something that I, I, I think about of, of doing a day-to-day aspect. It's great to do on the weekend. I really do see my passion working with, with clients and, and the businesses and, and, and look at the financial analysis. So I think the interest or lack of interest could be another factor why you don't want to to secede from the, the earlier generation. And what are your thoughts?

Yeah.

I think that sometimes people just aren't interested. It's not the industry that they're in. I was just, who was I speaking to the other day, one of the siblings or so one of the, the second generation, they, they were more artistic. They wanted to go into the arts and not in the family business. They just had zero interest and they were even willing to say, I don't care about the money. I don't care if you take me out of the wheel. I don't care if you don't give me anything from the business. I just want to be an artist. So I think that interest factor is important because, and I see this with my kids. My kids are only eight years old and six years old, I'm already trying to help, you know, carve out their future, help them guide them. Right. And we kind of think we're being good parents here by guiding them in the right direction. But is it truly the right direction? Because if it's in our direction while it might not be the right direction, because I think even every single person has their own path. So I see, I see that very, very prevalent. And it's an interesting question, Harj, because are people willing to give up money to do things that they're interested in?

Yeah. And I think that's where you're seeing a lot of conversations, certainly after the pandemic is. What is fulfillment? I think often we thought of fulfillment of, you know, climbing up the career ladder, having a status, having a big home, but only to realize that individuals early professionals are not happy where they are. So they may want to kind of take some time to step back and look at well, what else was there exciting in my life? I just never pursued. Cause he kind of gets stuck in that day to day kind of activity of of facilitation in your own career. So I do think that that does play a significant role for sure. I think that the part is sometimes children might want to carve their own legacy. Right? Sometimes there is this feeling that well, if it's handed to me, I mean, what lessons am I going to learn? I think being able to succeed in a family business is great. You know, having a little bit more leverage if you're able to extrapolate that going forward. But I think for some, some families, some children, it may be that, you know what, I want to create my own legacy, my own path, as opposed to having one already etched out for me.

Yeah. That's really interesting because I got off the phone with, to, to actually zoom I should say. Two CEOs are business owners. You can say they're CEOs of the company today that were having a tough time. One of the exercises I P P put people through is okay, list 10 things that you absolutely love doing. And both these gentlemen had a tough time doing that because they spent so much time in their business they forgot about what makes them happy. And one of them was just at a point where he was at a close to burnout. And one way to avoid burnout is stopped doing the activities that are causing you to burn out, but also do more of the activities that are actually enjoyable for you. That actually give you energy. And it was tough for these gentlemen to actually write down the things that give them energy because they've spent so much time effort doing things that they're not necessarily interested in. Maybe they're making a lot of money in, but it's not fulfilling them from the passionate perspective and a life perspective. So Harj, that's a really good point. Yeah.

Yeah. I think one way you could you know quickly gravitate to get the answers. You know, you had the financial means to stop doing what you're doing and look at or explore other avenues. What would you do? And if the answer isn't no, I want to stay where I am. I mean, chances are, there's a high probability that they would rather be doing something else. So I mean, something that I've learned through, through my years of wealth management and, and working with private clients is that if there was someone else that you could do, if you had the financial needs, a lot of the times they, they would pick someone else.

Hmm. Yeah. And most of us, it's tough to admit, but I think a lot of us, I had to come to that realization myself when I was in the corporate world, it wasn't something that I wanted to do. So a lot of us go through that, I think at some point in our lives, whether we want to admit it or not. The other thing that I see Harj is that this is an interesting one and I don't think parents want to hear this because this is a tough one. Sometimes the next, next generations just feel like they're going to get the money anyway. So why sweat and slave in the family business when, you know, mama and papa, someday are going to be selling the business or kicking the can, and the money is going to come to them any ways. Have you seen that?

Yeah. And I think, you know, we're, we're certainly seen some, some infighting with a very public company Rogers for years and the children going after each other in very nasty ways. But yeah, I know it does come up quite a bit. I think the underlying assumption there is that if they're not in a family business, they are expecting the money. That's not always the case or maybe not an equal share. But nonetheless, I think if there is, you know, if there's potential for there to be invited and maybe, you know, you don't get along with their siblings or at least as cordial enough where, you know, you can't sit down for Thanksgiving dinner, but in some cases it's just not going to flow working with your sibling or siblings on a day-to-day basis. And so we want to be cognizant of that as well. Certainly I know for, for us, as we've gone through different life stages, you know, it seems like we've probably spent more of our life being apart, geographically, where we have come together when it came to our family business, being in the same place, same time to kind of put our business first.

We've been able to do that, but that's not always the case certainly where it's a lot more demanding than where you're, where you're talking about five to seven days a week.

Well, I think what you're talking about is the challenges within siblings, right?

Challenging within siblings.

Yeah. And I think that's, that is a big reason why some, some people just don't want to get in the business cause they just don't want the headaches. Right. It's enough to deal with your mom or your dad when it comes to the business. But now you've got to compete potentially with your sibling. And a lot of competence, there is a lot of competition between siblings to perform. You know, who's a better son or daughter that happens a lot in families. What we're talking about here is a family dynamic and that's, that's very real inside a family business and outside of a family business, when you just bring it to a family business, it's just a whole different level. It just adds on, adds on another layer. So competition someone, a gen two or gen three may not want to enter the business because they just don't want to have any more headaches in terms of getting into rivalry with parents or the siblings.

What I was talking about originally Harj was them feeling like they're going to get the money, right? So regardless, so for example, you and I, regardless of whether you were in the business or let's just say you were in the family business and I decided, Hey, look, you know, hardest on the business, let him work his ass off. And when the business is sold, I'm going to get part of it anyways. You know, that attitude is out there and I'm not saying it's right or wrong, but it's prevalent. And maybe there's a way to address it. Maybe there's a way to not address it. I think if gen two is just being lazy and expecting the money, I think it's needs to be addressed because this is no offense to the next generation. I'm borderline gen X, gen Y. Harj, you're probably, you know, you're a couple of years younger than me.

You're more, you know, you're on the edge as well, but the next generations, and again, this is a total stereotype, but not necessarily negative, but we are raising kids. And I see it in my own kids where they're feeling entitled, where they feel like they can get something by not having to work for it. And that's the complete opposite of how we had to grow up. Right. I remember our moms saying, God gave you two hands and a brain use them. Right. And I still, I, I use that live with my kids because I want to teach them to be able to do the things for themselves and earn it. But hearts, do you have any thoughts in terms of how do we address those? I'm going to say kids, it could be, they could be in their twenties. It could be in their fifties, this kids that are not in the family business, but are expecting to get the money anyways.

Yeah. And I think where I've seen that certainly through, through practice, going back to my other days in wealth management is you see that being addressed with the estate plan in itself. So if you have one or multiple children who are in the family business and maybe one or other children that are not typically where you'd see that conversation come into play is well, because they're already in the family business, that part of the estate is going to be carved out for them. Right? So then you have another whole layer is, you know, does that family member want to inherit the business or within like the sell it, but for those children who were part of the inheritance planning, and they're not actually part of the business, there could be other assets part of this state where they may feel that they're getting their portion of, of these state plans.

So they're, they're not easy conversations. Certainly, they can be challenging. And, and sometimes it could be like you said, there could be competition, maybe one child or other children feel that they should be running the business and the other children, but not be right. So just because you have an estate plan doesn't mean that it's going to solve all the issues because for the parents, you know, once the Lord gives them wings, they're gone, they're dead. And they're not the, they're not the ones witnessing some of the potential issues or problems that could arise once their estate plan is, is actually going into effect with the executor. So there are ways to plan around it, but it, it takes conversation for sure, because you don't want there to be any surprises. Right? I think generally if you have good open, transparent communication of, of who's looking to stay in the business, but also trying to make it fair for those children who are not part of the business, it, it can be done. Good planning can be done.

It's really interesting because I used to be of the opinion that if you had a proper estate plan, you had a proper will and you had everything set up legally that that was set in stone and soon found out after that's not because things are, you know, people have test wills, they basically they'll go in and they'll be challenging all these estate planning things. So just because it's in writing doesn't mean that that's actually gonna happen because a lot of this stuff we see we've seen it. We continue to see it does go to court. Things are challenged. Estate plans are challenged. Now, obviously when you have it down legally and you're proactive, it it's a lot harder to challenge, but it still can be challenged. And I think one of our future episodes, we're going to bring on a gentleman who is a mediator, family mediator, that deals specifically with family challenges and what happens at the state stage.

And it will be a great opportunity for you out there listening to see some of the challenges and potentially even to see how to structure things properly so that you're not going through. Whether it's you, your sibling, a parent, your kids, whoever it may be, may not be going through the pain and suffering that ends up happening when there's a conflict when it comes to some of these challenges. So I think we rattle off rattled off, but the majority of the, the reasons why the next generation doesn't want to be in the family business. Harj, is there anything else that stands out for you?

No, I think that's off, but if we'd missed what, you know, certainly do welcome or on instant and listeners that feel free to jump on or call them next time we miss one. And we'd love to hear from you.

Yeah. If you've got any feedback, feel free to reach out to us. You can reach out to us at teamatbusinessbrothers.ca. That is our email. Feel free to reach out and give feedback. We'd love to hear your feedback anyways because as the show grows more and more, we want to make sure that we're addressing the value, the questions that our audience has. So, first of all, I want to thank you for joining us. Thank you for making the show a success and we'll see you next time.

Take care everyone.

Take care.