Cindy Iannerelli is recognised around the world for her innovative research and work teaching children business skills. She is Director of the Center for Family Business at Indiana University of PA and a visiting professor at The University of Trento, Italy.
Introducing your children to the family business at an early age can be the start of an educational 'plan' to develop business skills that could see them take over the family business – or become a successful business owner themselves
For the past 20 years business school professors have been struggling with how best to teach entrepreneurial skills in their classrooms. Some have realised that the best people to teach entrepreneurial skills and concepts are the people who do it every day – business owners.
Research shows that family businesses are the best place for children to learn the skills they need to become entrepreneurs themselves. Studies show that second generation children who grow up at the heels of their parents and observe their family operating a business are more likely to develop the skills necessary to be a successful business owner themselves, regardless of the industry they choose. These children develop stronger entrepreneurial skills than children who are highly intelligent, those who are from wealthy families and those who go to the best schools.
So, what is this special process that enables children to develop entrepreneurial skills at a success rate that greatly exceeds any other method? It is called The Business Cents Method and is a sequential process that can be used over a childhood span of 15-plus years. Entrepreneurial parents who want their children to experience this method can enroll their 5–17 year olds for a special programme at this year's Family Business Network Conference.
Early socialisation or the first stage of exposure, begins as early as age three and continues for about five years. It involves simply bringing a child to work and exposing them to another 'world' different from their own, and can include letting the child 'play business' in an office. In my childhood, where each of my parents owned a business, my brother and I were often brought to either my father's dry cleaning business or my mother's clothing shop. Both my brother and I enjoyed riding on the dry cleaning trucks, following my parents around the plant and squirting the steam guns. Admittedly, we weren't learning how to balance the books or take inventory, but a good business person would not entrust those activities to a child. This stage simply exposed us to the world of business, and our parents' in particular.
The second stage, or hands on stage, begins where the exposure stage left off – around the age of nine and lasts for seven years. As the children are older in this stage, they are also more capable to learn about and do things in the business. Thus, this stage involves giving children defined jobs at the business, which in turn helps them learn about the actual workings of the business. At this time, the business owner should also explain each part of the business in more detail – not only because the child is capable of understanding more, but because it will likely relate to the tasks he or she has been given. Most often, these tasks occur after school, during the summer or on the weekends. Of course, the job must be matched to the child's skills and interests.
I asked my mother how she knew to move my brother and me into the hands on stage with jobs like sweeping the floors, washing the trucks, preparing supplies and attending trade shows. She replied, "For us it was simple – we couldn't afford babysitters and those jobs kept you two busy while your father and I did our work." An honest answer that, on the surface, may sound like a practical solution to an everyday problem. But the effect was not to just keep us out of trouble, but to teach us about the inner workings of both their businesses and the working world, and the value of a job well-done.
The third and final stage of the process is the broadening experience stage. This stage takes place around the age of 16 and runs for about five years. Up until this point, the children have been working in the family business in the hands on stage. However, during this next stage in the process, business owners should encourage their children to gain experience outside the business. While this can mean gaining employment elsewhere, other options include internships, traveling, attending industry and community trade functions and the like. It is a valuable experience, especially for a child who up until now has only been exposed to the business world of his parents.
For me and my brother, we benefited from international travel and summer internship experiences during our late teen years. This, combined with our early socialisation from our preschool years, was a blessing when my father suddenly died when I was 18 and my brother was 20. Our experiences meant that we were able to step in and assist my mother with the company operations. That was 22 years ago and today the company continues to operate and expanded into several other divisions. Presently there are five children in the third generation and we have begun the training and development process all over again.
A plan for the future
There is little doubt that the process of nurturing entrepreneurial skills in children becomes more difficult with each generation. With more financial success there is less opportunity for young children to naturally be at the business. But a proper plan can ensure that the next generation of family business owners develops these important entrepreneurial and life skills – and hopefully even see them successfully taking over the family business.