Michael Dacey left his career with a large law firm in Philadelphia to join his family’s insurance business, Dacey Insurance Agency Inc. in East Greenwich. The move turned out well for him, but leaving one career for another in a family business is more risky than most people realize, say business consultants.
The lawyer and CPA was making a good salary at the law firm when his father contemplated selling the family insurance business he started in 1993 to retire. After considering the pros and cons, Dacey decided in 2004 to leave his legal career and learn the insurance ropes. In 2007, he became a second-generation owner of Dacey Insurance.
“The family business provided an opportunity to come back home,” Dacey said. “It also gave me the opportunity to perpetuate the family business and the chance to be entrepreneurial, to bring the business to the next level.”
The business was in good shape when Dacey took over and he’s grown it through a strategic partnership, technology upgrades and marketing. He also expanded the portfolio of property insurance, commercial insurance and contractor bonding to include life and health insurance.
“People think I’m crazy for leaving a job as a lawyer to run a family business, but salary isn’t the only reason to take a job,” Dacey said. “I used to be strapped to a desk all day, but in this industry, I’m out meeting with different business owners all the time and it’s exciting.”
Though Dacey made the right choice for himself, many people transition to a family business without the proper expectations or preparations, said Wayne Rivers, co-founder and president of the Family Business Institute Inc. in North Carolina.
“It’s a huge career move, but most people who enter a family business do less homework and are less introspective than if they were moving from public company A to company B,” Rivers said. “It’s like getting married; it’s a huge decision, but people don’t make the decision in a strategic way, they do it because it feels right. Judgment goes out the window.”
There’s also the issue of your position with the family business and how it will impact other employees. For instance, a 40-year-old bank executive who worked his way up the ladder won’t want to dig ditches for the family construction business just because that’s how grandpa started out. On the other hand, taking a high-ranking position, even if you are more than qualified, will anger employees who have worked through the ranks, Rivers said.
“Be prepared for an uphill climb until you are able to prove your capabilities,” Rivers said. Just like taking a job at any company, you need to know the family business is financially stable. But don’t take the family’s word on how the business is doing; examine past finances and the five-year plan – which many small, family businesses don’t even have, Rivers said.
Dacey admitted there were arguments when it came to implementing ideas he thought would move the insurance business forward. For example, it took some convincing to move from the paper file system to computers and automation, he said.
Someone coming from the corporate world that is used to formal reports and established practices such as performance reviews and regular raises may also be in for a rude awakening when they join the family business, Paradise said. “Family businesses are less structured, and relationships have much higher value,” he said.
The business also changes families, in that it becomes the gravitational center of the family life, Paradise said.
“The dynamics of working in a family business can be tough, because you move from father and son to business partners,” Dacey said. “It can be challenging, but also rewarding.” •
