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My FiL shut down his multigenerational business in Japan for exactly this reason. I was not in a position to take it over and no-one else in the family wanted

My FiL shut down his multigenerational business in Japan for exactly this reason. I was not in a position to take it over and no-one else in the family wanted it. It was a very successful shop with a built in client base and hugely recognizable name in that community. Culturally the lack of children means there are fewer chances for someone to want to take over a family business, so the likelihood of someone taking it over drops every generation.

luckylion 4y ago
Are the children shying away from it because whatever business it is just isn't something they like (i.e. vegans not wanting to take over a butcher's shop), are they finding better offers outside of the family business (i.e. the businesses aren't making money), do they just not need to work because the business have made the family wealth (which is what I see a lot in Germany), or is it something else entirely?
- jakzurr 4y ago
  My impression is, most of them want better pay. (And probably better hours, as some of these business owners wear many hats, and work very long days.)
  - Ekaros 4y ago
    And if they are in the Japanese career system, likely more stability and less uncertainty. Owning even a self-sustaining small business isn't always that great style of living.
- CobaltFire 4y ago
  I’m this case no one had the interest in it. The family is very well off by Japanese standards but they all work.
- dagw 4y ago
  Having seen this happen a few times (although in Europe) it is almost always that simply no one wanted to work in that sector. It is a lot more common these days that children have gone off to university and gotten an education in something that actually interests them, and then naturally they want to work in the field instead. It doesn't even have to be as extreme as "vegans not wanting to take over a butcher's shop", but simply "I'd rather be an architect than sell farming equipment", even if selling farming equipment might pay better.
  - nelgaard 4y ago
    Yes, also traditionally the business would go to the eldest son. He then knew all his life that it would become his business and prepared for it. Now it can go to all sons and daughters. That means that the one best suited can be chosen. But all the children will have to build a career. And none of them feel particular responsible for continuing the business.
- selfmodruntime 4y ago
  Exactly. I could either take over a back breaking plumbing business and kiss my knees goodbye at 45 or take a cushy software job for a relatively small pay cut.
BitwiseFool 4y ago
Japan has a very service oriented business culture and from what I can tell a lot of the loyalty is based on knowing the owner and their family. Is it possible so many Japanese are unwilling to take over a business because they predict that the longtime customers will feel alienated and underwhelmed by the relationship with the new owner? In other words, do potential buyers purposefully avoid taking over business because they know they cannot live up to expectations in the same way a family member can?
- CobaltFire 4y ago
  This is accurate; no one outside the family would have been able to use the client base.
  - Scoundreller 4y ago
    The usual approach is to effectively “apprentice” under the old owner as they increasingly hand over responsibility and retire. No matter what you’ll lose clients, but lose a lot less than if Alice disappears one day and Bob magically appears the next with little handover. Dunno if that could work in Japan.
    - phnofive 4y ago
      It's a thing: https://www.independent.co.uk/life-style/japanese-adoption-rates-majority-adult-men-a7524301.html https://www.independent.co.uk/life-style/japanese-adoption-r...
      - pessimizer 4y ago
        It's a thing everywhere, and doesn't require adoption (or making one of your child's spouses your successor.) I know a printer right now where the owner has been working towards retiring and selling the business to his now-manager eventual-successor for a few years. The owner has reduced his work responsibilities to sales only at this point, and the goal has been to make his networks comfortable with his successor as he slips away (to live closer to his grandchildren, I bet.)
abledon 4y ago
Elon's twitter feed is 5% about this issue lol
- nequo 4y ago
  He does have nine[1] living children though. [1] https://archive.ph/20220707002423/https://www.thetimes.co.uk/article/elon-musk-had-twins-with-one-of-his-executives-kzph2nrc5 https://archive.ph/20220707002423/https://www.thetimes.co.uk...
  - abledon 4y ago
    oh yeah, i was saying he was advocating _for_ more children to replace population
    - ilyt 4y ago
      Gotta get that cheap workforce from somewhere, can't let the tech progress help the little guy work less!
sacnoradhq 4y ago
This seems like a startup opportunity. Even if risking outsider status of seeking foreigners and finding a way to transition continuity of a particular shop's philosophy, it's terrible when a good business, like a living organism, is killed unnecessarily. Certainly there are highly-motivated foreigners who would migrate from places like Africa, Eastern Europe, and SE Asia who would leap to "rescue" a viable business in some manner. The business afterwards would not be the same, but it would be better than destroying all that hard work (and value) and the customers' delight. The culture and language would need to be learned and customers' convinced of the new owner's business skills, but these are not impossible barriers. I hate to see value thrown away, be it small-time manufacturing of specialized art, food, or equipment or even a corner grocery store... value thrown away is setting fire to money.
- xwdv 4y ago
  In Japan, forget about it. The business will sooner shut down than be given away to some filthy gaijin.
- nullsense 4y ago
  >The culture and language would need to be learned and customers' convinced of the new owner's business skills, but these are not impossible barriers. ...I would put it in the realm of pretty unrealistic. Curious if you're fluent in Japanese and familiar with Japanese culture or not?
- JCharante 4y ago
  If customers aren't fond of new owners I doubt they'd be fond of foreigners
random314 4y ago
As the population shrinks, the businesses too have to shut down :( The inevitable in action.
ipaddr 4y ago
In this story and in yours both had children
Finnucane 4y ago
It happens here in the US too--family businesses that have no one to take over when the owners retire or die. If they haven't prepared a successor--whether a next-gen family member or employee, few may be willing to step in. So the business will just close.
- iancmceachern 4y ago
  It does. It often also happens even when there are people to take over, like in my families case. My dad didn't want me to inherit my parents business, in his words I would be inheriting debt.
makeitdouble 4y ago
> no-one else in the family wanted it This is really the key part. A business can be successful yet soul crushing or not making financial sense compared to other jobs. In France bakeries are facing this same issue: one can support the whole community and be wildly popular while being a losing proposition for the owning family, and it’s becoming a real issue to find a better balance and people to keep the traditions alive.
- tw98521358 4y ago
  Yeah bakery business is soul crushing. You have to work night shift without the pay differential. Way too much competition, labor of love
- caseyross 4y ago
  I think this gets to the core of it. It's just not economic anymore. My sense is that most of these family shops were started during the mid-20th century when the economy in developed countries was more accommodating to small business. Through decades of ever-increasing pricing pressure from giant multinationals, the most successful family operations could still keep their doors open because of the trusted reputation they had earned in their communities. But even that lifeline is increasingly imperiled as their best, longest customers age out and die, and are not replaced by younger customers because of constantly falling wages in real terms.
  - makeitdouble 4y ago
    Also to note: older generations were more used to crappy work conditions. They didn’t enjoy it, oh no, and we saw the endless battles to get rid of dangerous and body crushing jobs, all the fight for unions, workers getting shot during strikes etc. And many traditional jobs were just a step below in terms of pressure and work hours. In a way, their wish for a better future for their children mostly got realized, and a lot of traditional occupations didn’t or couldn’t adapt to that mindset. The family business in the article is a farmer in the north, and by today’s standard it’s usually a brutal job, “work life balance” is basically an imaginary concept, there’s little leeway for error (forget to turn some knob just once in the dozens of time you do it in a day, and you have a month worth of production gone away), and you’re facing enough natural and economic odds that investment is basically akin to gambling.
tkgally 4y ago
A related problem is when a child is available to take over the company but turns out not to be competent and the company ends up failing. I’ve been living in Japan for forty years, and I’ve known a half dozen such cases personally. Several failed when the succession reached the third generation: the founder had been talented and ambitious and made the company a success; his son was less talented but, having been mentored by his father, worked hard and kept the company going reasonably well; and the grandson was a spoiled goof-off who didn’t take the job seriously. In one case I know, several dozen employees lost their lifelong jobs as a result.
- mschuster91 4y ago
  The blame is a bit on the first and second generation as well though. Ideally, once a company grows large enough, there should be a layer of upper management as well that has both the competence and the freedom to make actual decisions... meaning that even in the case the company owners end up being dumb-as-rocks spoiled morons, the company survives. However, many on the smaller side go the way that the old 80+ generation keeps on micromanaging decades after their children have taken charge - a real problem in the German Mittelstand, because these fossils grew up with faxes and simply don't get the requirements of the modern age. They simply can't accept the idea that they have done their part once they reached retirement age and it is a natural requirement for them to actually retire so that the younger generations can learn and rise!
- blisterpeanuts 4y ago
  Not only in Japan; there have been many similar cases in the U.S. as well. Family businesses rarely do as well when the children or grandchildren take over. Though, of course, there are a few exceptions.
- steve_gh 4y ago
  Where I come from there is a saying "Clogs to clogs in 3 generations"

luckylion 4y ago

Are the children shying away from it because whatever business it is just isn't something they like (i.e. vegans not wanting to take over a butcher's shop), are they finding better offers outside of the family business (i.e. the businesses aren't making money), do they just not need to work because the business have made the family wealth (which is what I see a lot in Germany), or is it something else entirely?

jakzurr 4y ago
My impression is, most of them want better pay. (And probably better hours, as some of these business owners wear many hats, and work very long days.)
- Ekaros 4y ago
  And if they are in the Japanese career system, likely more stability and less uncertainty. Owning even a self-sustaining small business isn't always that great style of living.
CobaltFire 4y ago
I’m this case no one had the interest in it. The family is very well off by Japanese standards but they all work.
dagw 4y ago
Having seen this happen a few times (although in Europe) it is almost always that simply no one wanted to work in that sector. It is a lot more common these days that children have gone off to university and gotten an education in something that actually interests them, and then naturally they want to work in the field instead. It doesn't even have to be as extreme as "vegans not wanting to take over a butcher's shop", but simply "I'd rather be an architect than sell farming equipment", even if selling farming equipment might pay better.
- nelgaard 4y ago
  Yes, also traditionally the business would go to the eldest son. He then knew all his life that it would become his business and prepared for it. Now it can go to all sons and daughters. That means that the one best suited can be chosen. But all the children will have to build a career. And none of them feel particular responsible for continuing the business.
selfmodruntime 4y ago
Exactly. I could either take over a back breaking plumbing business and kiss my knees goodbye at 45 or take a cushy software job for a relatively small pay cut.

BitwiseFool 4y ago

Japan has a very service oriented business culture and from what I can tell a lot of the loyalty is based on knowing the owner and their family. Is it possible so many Japanese are unwilling to take over a business because they predict that the longtime customers will feel alienated and underwhelmed by the relationship with the new owner? In other words, do potential buyers purposefully avoid taking over business because they know they cannot live up to expectations in the same way a family member can?

CobaltFire 4y ago
This is accurate; no one outside the family would have been able to use the client base.
- Scoundreller 4y ago
  The usual approach is to effectively “apprentice” under the old owner as they increasingly hand over responsibility and retire. No matter what you’ll lose clients, but lose a lot less than if Alice disappears one day and Bob magically appears the next with little handover. Dunno if that could work in Japan.
  - phnofive 4y ago
    It's a thing: https://www.independent.co.uk/life-style/japanese-adoption-rates-majority-adult-men-a7524301.html https://www.independent.co.uk/life-style/japanese-adoption-r...
    - pessimizer 4y ago
      It's a thing everywhere, and doesn't require adoption (or making one of your child's spouses your successor.) I know a printer right now where the owner has been working towards retiring and selling the business to his now-manager eventual-successor for a few years. The owner has reduced his work responsibilities to sales only at this point, and the goal has been to make his networks comfortable with his successor as he slips away (to live closer to his grandchildren, I bet.)

abledon 4y ago

Elon's twitter feed is 5% about this issue lol

nequo 4y ago
He does have nine[1] living children though. [1] https://archive.ph/20220707002423/https://www.thetimes.co.uk/article/elon-musk-had-twins-with-one-of-his-executives-kzph2nrc5 https://archive.ph/20220707002423/https://www.thetimes.co.uk...
- abledon 4y ago
  oh yeah, i was saying he was advocating _for_ more children to replace population
  - ilyt 4y ago
    Gotta get that cheap workforce from somewhere, can't let the tech progress help the little guy work less!

sacnoradhq 4y ago

This seems like a startup opportunity. Even if risking outsider status of seeking foreigners and finding a way to transition continuity of a particular shop's philosophy, it's terrible when a good business, like a living organism, is killed unnecessarily. Certainly there are highly-motivated foreigners who would migrate from places like Africa, Eastern Europe, and SE Asia who would leap to "rescue" a viable business in some manner. The business afterwards would not be the same, but it would be better than destroying all that hard work (and value) and the customers' delight. The culture and language would need to be learned and customers' convinced of the new owner's business skills, but these are not impossible barriers. I hate to see value thrown away, be it small-time manufacturing of specialized art, food, or equipment or even a corner grocery store... value thrown away is setting fire to money.

xwdv 4y ago
In Japan, forget about it. The business will sooner shut down than be given away to some filthy gaijin.
nullsense 4y ago
>The culture and language would need to be learned and customers' convinced of the new owner's business skills, but these are not impossible barriers. ...I would put it in the realm of pretty unrealistic. Curious if you're fluent in Japanese and familiar with Japanese culture or not?
JCharante 4y ago
If customers aren't fond of new owners I doubt they'd be fond of foreigners

random314 4y ago

As the population shrinks, the businesses too have to shut down :( The inevitable in action.

ipaddr 4y ago

In this story and in yours both had children

Finnucane 4y ago

It happens here in the US too--family businesses that have no one to take over when the owners retire or die. If they haven't prepared a successor--whether a next-gen family member or employee, few may be willing to step in. So the business will just close.

iancmceachern 4y ago
It does. It often also happens even when there are people to take over, like in my families case. My dad didn't want me to inherit my parents business, in his words I would be inheriting debt.

makeitdouble 4y ago

> no-one else in the family wanted it This is really the key part. A business can be successful yet soul crushing or not making financial sense compared to other jobs. In France bakeries are facing this same issue: one can support the whole community and be wildly popular while being a losing proposition for the owning family, and it’s becoming a real issue to find a better balance and people to keep the traditions alive.

tw98521358 4y ago
Yeah bakery business is soul crushing. You have to work night shift without the pay differential. Way too much competition, labor of love
caseyross 4y ago
I think this gets to the core of it. It's just not economic anymore. My sense is that most of these family shops were started during the mid-20th century when the economy in developed countries was more accommodating to small business. Through decades of ever-increasing pricing pressure from giant multinationals, the most successful family operations could still keep their doors open because of the trusted reputation they had earned in their communities. But even that lifeline is increasingly imperiled as their best, longest customers age out and die, and are not replaced by younger customers because of constantly falling wages in real terms.
- makeitdouble 4y ago
  Also to note: older generations were more used to crappy work conditions. They didn’t enjoy it, oh no, and we saw the endless battles to get rid of dangerous and body crushing jobs, all the fight for unions, workers getting shot during strikes etc. And many traditional jobs were just a step below in terms of pressure and work hours. In a way, their wish for a better future for their children mostly got realized, and a lot of traditional occupations didn’t or couldn’t adapt to that mindset. The family business in the article is a farmer in the north, and by today’s standard it’s usually a brutal job, “work life balance” is basically an imaginary concept, there’s little leeway for error (forget to turn some knob just once in the dozens of time you do it in a day, and you have a month worth of production gone away), and you’re facing enough natural and economic odds that investment is basically akin to gambling.

tkgally 4y ago

A related problem is when a child is available to take over the company but turns out not to be competent and the company ends up failing. I’ve been living in Japan for forty years, and I’ve known a half dozen such cases personally. Several failed when the succession reached the third generation: the founder had been talented and ambitious and made the company a success; his son was less talented but, having been mentored by his father, worked hard and kept the company going reasonably well; and the grandson was a spoiled goof-off who didn’t take the job seriously. In one case I know, several dozen employees lost their lifelong jobs as a result.

mschuster91 4y ago
The blame is a bit on the first and second generation as well though. Ideally, once a company grows large enough, there should be a layer of upper management as well that has both the competence and the freedom to make actual decisions... meaning that even in the case the company owners end up being dumb-as-rocks spoiled morons, the company survives. However, many on the smaller side go the way that the old 80+ generation keeps on micromanaging decades after their children have taken charge - a real problem in the German Mittelstand, because these fossils grew up with faxes and simply don't get the requirements of the modern age. They simply can't accept the idea that they have done their part once they reached retirement age and it is a natural requirement for them to actually retire so that the younger generations can learn and rise!
blisterpeanuts 4y ago
Not only in Japan; there have been many similar cases in the U.S. as well. Family businesses rarely do as well when the children or grandchildren take over. Though, of course, there are a few exceptions.
steve_gh 4y ago
Where I come from there is a saying "Clogs to clogs in 3 generations"