Starting a business with family is a tricky endeavour. On one hand, you can build your relationship with relatives through hard work and success. But on the other hand, there’s the possibility of creating tension with your kin due to stress, disagreements, or failure. How can you plan for the best outcome while preventing the worst? This guide will help keep your family closely-knit rather than at odds with each other because of the business.
Handle the Nitty Gritty
You’re all starting the business, so do the business stuff first. Figure out a succession plan, acquire the necessary permits, and find an office space, retail location, or headquarters. By sorting this stuff out together right away, you’ll get a sense of what you’re getting into.
Agree on a Business Plan
Whether the business is destined for success or failure, an agreed-upon business plan will chart your course. All involved will be spared countless hours of bickering and stress if a plan is established before everyone commits.
Ditch the Baggage
Before even coming up with a name for the business, your family member(s) need to sit down with you to clear the air. Any deep-seated issues need to be confronted. If your business begins to grow with any subconscious resentments still festering, this could torpedo any talks or agreements at crucial stages. Hostile memories should be forgiven and forgotten. You don’t want your brother backing out of a multimillion-dollar offer because you embarrassed him in front of his prom date more than a decade ago.
Establish a Hierarchy
If you can’t handle calling your younger sister “boss,” then you shouldn’t plan a business where she’s running things. The same goes if you have a problem with being your father’s manager. In a business, you must follow the established hierarchy. Whether you or someone else calls the shots, everyone must be on the same page about their roles. Even as co-owners, you’ll have to figure out what aspects of the business each of you will oversee. And when it comes time to make a decision, sit down and discuss it with your partner(s).
Set Reasonable Expectations
Just because you’re a workhorse, it doesn’t mean everyone else is. You shouldn’t expect the same level of work from others, particularly your family members. Everyone goes at their own pace. If someone works too slow for your liking, it’s possible they’re just being more meticulous and careful than you would be. In any case, that’s how they work, and you should respect it. Don’t set expectations or believe yourself to be the measuring stick for others.
Separate Family and Business
You may work with your family, but at work, they shouldn’t be viewed as anything other than co-workers. Restrict family talk for breaks or outside of work; by that same token, you don’t want to bog down social event with business chat. Try to keep your family lives and work lives distinct as much as possible.
If All Else Fails…
Bring in a mediator. If there’s a point of contention that neither of you will get past and you need a third party to settle the issue, look outside of your social circle. Don’t bring friends or family associates into the situation, as they might be biased. And definitely avoid involving other members of your family who aren’t a part of the business, since they don’t have a financial stake in the company and taking sides could lead to tensions within the family.
There are certainly advantages to being in business with your family, but there are also many potential pitfalls. Before you launch a family business, or involve a family member in an existing one, keep the above in mind, and you’ll be one step closer to success.
Alex Correa | Staff Writer