Brothers Gong Separate Ways or Not?

Table of Contents

Brothers Going Separate Ways or Not?        

Entrepreneur or Small Business People?        

Is There Really a Difference?        

Advice        

Derrick        

Kevin        

Contributions        

Conclusion        

References        

Brothers Going Separate Ways or Not?

The transition from one generation to the next can make or break a family business. In this case, there are many similarities to the majority of family businesses getting ready for succession. According the Pew Research Center, 10,000 baby-boomers turn 65 and retire every day, and as a result, scores of family businesses are being passed down to Gen Xers, and Millennials. Because of the often extreme generational disconnects, the pass-downs are seldom easy. (Pew Research center, 2010)

The parents of the Petersen twins fit the profile of many baby-boomers; specifically, due to their resistance to change and new ideas. Studies show that there is a large amount of conflict between the older baby-boomer generation and the younger millennial generation and that conflicts often arise between the two that sap productivity and growth. (VitalSmarts, 2014) Millennials are also considered to be very welcome to collaboration and are extremely open to new ideas, which the twins exhibit according to the case.

Entrepreneur or Small Business People?

The profiles of the Petersen twins fit that of an older Millennial aged 25-33. The case shows that they are willing to take risks as well as take on new ideas that their parents aren’t too keen on accepting. Kevin is more open to being a risk taker, as he wants to expand a new business from the ground up to the national and international level. Leonard C. Green tells his students at Babson College, “Entrepreneurs are not risk takers. They are calculated risk takers,” (Brown, 2013) Kevin has become acquainted with family bankers, has $200,000 of funds from the family, has experience from an internship with the Small Business Association (SBA), and spent a semester in London to gain experience on European business. Kevin fits the profile of a typical entrepreneur because of the carefully calculated risks he is willing to take, and his aspirations for extreme growth.  

Derrick on the other hand, acts more like a typical small business owner. Although he still wants to make significant additions to the family business, his plans aren’t as drastic as Kevin’s. Derrick fits into the “Legacy Builder” profile of a small business owner. (Infusionsoft, 2014) He is most likely to rely on his family for guidance, and only focus on one business, which he has already expressed his desire to do with the family business. He wants to bring something new to the marketplace by additions of a custom auto parts shop, car wash, gas pumps, as well as a convenience store to the existing location.

Is There Really a Difference?

There are clear differences between a small business person, and an entrepreneur that are perfectly relatable to the both Kevin and Derrick as described by Shobhit Seth of Investopedia:

• Small Business usually deal with known and established products & services, Entrepreneurial Ventures are for new innovative offerings
• SBs aim for limited growth and continued profitability while EVs target rapid growth and high productivity returns
• Small Businesses deal with known risks; Entrepreneurial Ventures take deep dive with lots of unknown risks
• EVs generally impact economies & communities in a significant manner, which also results in a cascading effect on other sectors like job creation. Small businesses are more limited in this perspective and remain confined to their own domain and group.

(Seth)

Advice

Because of each brothers’ different plans of action, they require different advice to fit their goals. Advice for someone inheriting a family business won’t necessarily work for an entrepreneur that wants to start from scratch and venture out to the national and international level, and vise-versa.

Derrick

Derrick is basically choosing to take over the family business and implement his own ideas to stimulate its growth. Besides figuring out a way to deal with his parents and their aversion towards change, he should Do a self-analysis by asking himself if he is qualified to really run the family business, as well as ask himself if he has the passion to really see it through to the future. He should evaluate the business as well.  Is there potential for growth, and can he handle the risks involved with implementing his changes? If he were to keep his parents on as seasonal employees, he will need to keep his emotions under control and learn to work with them. If they are really letting him run the business, then he needs to make them understand that it is his choice to expand the business and just because they used to own it, it doesn’t mean they have the final say in its new direction. He should also consult experts that aren’t part of the family for financial advice and consulting because they will be objective and only focus on the facts without being tied up in the emotional aspect of the business.

Kevin

Camping World CEO Marcus Lemonis said in an interview with Business Insider: “Get into a business where you can be a big fish, not the little fish. Get into a business where you can be a change agent, where you can make a difference. It's worked well for me." (Nisen, 2013) The biggest problem with Kevin’s plan is that there are already a very large number of well-established service businesses around the world, and venturing out to create a service franchise the can compete with the other “big fish” can be a pretty daunting task. Kevin has already calculated the risks from the case’s standpoint so he must be able to take them as well. If he is to branch out with a new franchise, then he must also take advantage of social media to bring awareness to his business. He should also find a mentor if possible, and above all else, be prepared to fail. Failure isn’t the end of the world and he needs to understand that he can learn from his mistakes.