Unfortunately, the "start, grow, and sell" ethic is deeply ingrained in
American culture. For more family businesses to make it to another gener-
ation, a change in culture is necessary. How does one change culture? As
with anything, private beliefs must change before public behavior can fol-
low. For the culture of American business to change, the private culture of
family business owners -- their values and attitudes -- must change first.

A common joke told about family businesses has it that the first genera-
tion builds the business, the second generation lives off the business, and
the third generation kills the business. The truth in this derives from the
expectations and training that family business owners give to their chil-
dren. In too many families, parents send signals to their children that
running a family business is a stressful and unfulfilling endeavor. For ex-
ample, wishing to spare their children unnecessary worry about problems
they can't understand, parents unwittingly turn their children against the
business by banishing business talk from the dinner table, closing off op-
portunities to share both disappointments and triumphs. Or, in their ef-
forts to bequeath the American Dream (whereby their children will be
better off than they are), parents cave in to the temptation of selling the
business to ensure their children's financial well-being, while ignoring
the intangible benefits that are gained by instilling in them the values of
hard work and social responsibility.

A 1992 study by Douglas Holtz-Eakin of Syracuse University and
David Joulfaian of the U.S. Treasury, which was based on IRS records,
found that only 4.5 percent of those who received an inheritance of less
than $25,000 dropped out of the workforce, but one in five dropped out
when they received more than $150,000. Another study conducted by
economist David Weil of Brown University in 1994 showed that the
mere expectation of an inheritance can cause people to spend more and
save less. ¹

Contrast this with the values presented when a family business is not
sold. Discussions around the dinner table center on satisfied customers or
pride in a new product. Children are shown a full, rounded picture of the
life their parents enjoy; they see for themselves the daily, nonmonetary re-
wards of hard work; and they come to understand that by joining the fam-
ily business they can anticipate a similar life for themselves and their future

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