Family is one of the most important units of society. These are the people we’re closest to. We share history. We love them. We trust them. We spend a lot of time with them. Starting a company together can be a great idea. And a great risk.
There are many successful family businesses. Many small businesses have begun or expanded through a family partnership. Working with a sibling, an offspring, a spouse or an in-law may seem like an obvious, easy decision. It’s not. Going into business with your family is unlike any other challenge you’ve ever undertaken before. Since it requires both a big emotional investment as well as a financial one, it’s worth considering how family dynamics will coexist with business to help make a new family venture work.
Over the last five years I have worked in partnership with my farther-in-law starting and building our business. We’ve had our fair share of ups and downs, agreements and disagreements but on the whole we work well together and have enjoyed many successes. Here are my five key pieces of advice for working with your family and making it work.
1. Keep it professional
First and foremost, when you’re in the office discussing business matters, you’re not speaking with your family, you’re business partners. A lot of people find this step particularly difficult. Sometimes the respect you would give to a co-worker isn’t there with a family member.
You need some professional boundaries. Instil a collective understanding that business life and personal life are two separate things. Don’t let personal matters and unresolved issues inhabit the same space in which you work. Likewise, don’t adopt a casual approach to your work. Set goals, arrange meetings, schedule important discussions and create structure in your day. When you create these boundaries and work practices, you’re giving yourself a chance to build up the professional respect you need. It allows you to see each other in a different light and often strengthens your personal relationship too.
An older sibling or parent could be accustomed to playing a leadership role in the family. In a business environment this person may not be the leader. Instead, each person should be assigned the job that best suits their skills. Encourage your family to harness each person’s talents and respect each other’s authority no matter what your usual family dynamic is. There is no room for egos and emotions in business. If you don’t want most of your meetings to turn into family therapy sessions, then it’s imperative that you all learn to separate business from personal.
2. Clearly define your roles
Clarity is key. Never assume what others can or cannot do. Don’t assume your relative will perform a certain function within the business. Don’t expect everyone to be able to read your mind and understand things the way that you understand them. Unfortunately, assumptions can ruin a family business. Without clear communication you may find everyone pulls in different directions to the point where getting everyone back on the same page is next to impossible. So before starting your business, you should have a focused discussion about each person’s role in the company. Each individual should know what their job is and what is expected of them. You may be family, but it’s important that you get everything in writing. Remember, ambiguity is the enemy.
3. Ask ‘what’s next?’
So you’ve achieved the first two points; everyone understands the boundaries and are clear about their individual contribution. But does everyone see the same future for the business? Do you agree on the company’s direction and share the same goals?
Your family business won’t have the same meaning for every family member. What one person sees developing into a multi-million dollar enterprise, another may see as a stepping stone towards another business venture. Some family members may simply see this as an opportunity to spend more time together or a way to balance a career and caring for kids. You should sit down and ask everyone what their motivation is? What does each person want to get out of it?
Why is this so important? From a business standpoint, these motivations will shape your business strategy and your plan for the future. You can think about the way your structure is set up and be realistic about the succession strategy. Knowing what everyone wants up front minimises any future misunderstandings or disturbances in your operation.
4. Don’t neglect family time
Sure, you’re running a business together and you’re full of creative, exciting ideas that you’ll want to share with each other. However, it’s important you remember that you’re a family. You need to continue to nurture the bond that you share. This means that you should plan family activities that don’t involve work. Make business discussions off limits while you’re spending quality time together. Not only will this help to keep your family unit together, but it will also strengthen the team mentality that you need when working together.
5. Hope for the best but prepare for the worst
Not every family is suited to go into business together. Maybe your personalities are too different? Or too similar? Maybe family life will become too stressful if you start a company together? Whatever the case may be, you’ll find that these issues will either cause you to come together and work harder or just completely scrap the whole idea altogether. This is why it’s important to brace yourself and have a practical and amicable exit strategy just in case things don’t pan out in the way you would’ve hoped.
Working with family can be an endeavour that tests your business skills and personal relationships in equal measure. If you’re dedicated to maintaining an open line of communication, respecting one another, charting a clear direction and being up front about your ambitions, then it can be a very successful and profitable decision for everyone involved.
About the author:
Matthew White is the Director of Ergoflex Australia, Australia’s leading online mattress company. Matthew works in partnership with his father-in-law in the Hunter Valley, NSW. Matthew is passionate about small business in Australia and all things marketing and sleep related.