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Should you go into business with family?

Working with family requires a balance between the personal and the practical

Photo by Joshua Rodriguez /Unsplash

It’s easy to decide to go into business with family, but it’s much harder to get out of it when things don’t work out. When choosing business partners, the former seems like a fine idea and at times perhaps the best, most obvious decision you can possibly make: Of course you should go into business with family—don’t they always have your best interests at heart? Don’t they know you best, which therefore guarantees a more instinctual and seamless working relationship? 

That line of reasoning, though not entirely naive, suggests a conflation of the personal with the practical. When the two become inextricable, problems start to surface. Emotions and personal attachments are flimsy foundations for practical decision making. They’re ineffectual responses to conflict—when you learn, for instance, that you and your family have wildly different levels of risk tolerance or for that matter, entirely different goals.

Yet this isn’t an either-or point of contention. It’s a question of proper navigation through the aid of definite boundaries and rules. If the question of going into business with family is something you’ve been pondering, consider these rules first: 

KNOW YOUR ROLES 

Before you venture into the business world, everything needs to be set up properly. Business can’t run solely on passion—you also need to understand certain legalities. It’s important, as business partners, to have a legal contracts. You can’t just suddenly shift roles in the middle of the operation. Establish the areas both of you are willing to focus on (without sacrificing transparency, of course) by identifying each other’s strengths and weaknesses.

If you’re more of the organized type, then you might want to handle accounting and finances while your partner works on marketing and promotion. Achieving this type of balance is ideal in any business venture. Being specific and clear about responsibilities will help you manage your own expectations from the beginning. Try to address as many concerns as possible before they even happen and prepare the necessary contingency plans.

“I think the most important thing about working with family is that you need to keep it professional at all times. Knowing when to talk personal matters and when to talk business, and trying as much as possible to not let the two overlap, are essential to running a business with your family,” said Ana Lorenzana of the Wildflour Group.

Agreeing on legal terms also sets the ownership and business type you want to adhere to. In case things go downhill, at least there is something that binds the whole business together. It would be best to get a lawyer or legal advisor to facilitate the formalities of your business. Don’t be afraid to re-read piles of forms and sign lots of papers because this will safeguard your business and aid you in understanding how the industry works.

PUT THE PRIDE ASIDE

Perhaps the most dreaded reason why lots of people don’t want to engage in business with family is the disagreements that might put years worth of relationship in jeopardy. Conflicts are just sitting around the corner. And aren’t those inevitable, even necessary?

The art of knowing when to step back is much more complex than you’d think. If you made a mistake, own up to it, sincerely apologize and propose a resolution. Saying “I’m sorry” would help fix the unsettled things you have with your partner and with yourself. But if the other party was the one who failed to meet expectations, veer away from the temptation to say, “I told you so.” This simple act can go a long way in managing future conflicts and in your working relationship in general. Clear out some headspace before discussing things and then eventually, compromise.

As Jade Santos, co-owner of vegan restaurant Green Bar with her sister Sarada, says: “If we disagree about something, we just hash it out. We test, we get other opinions, we compromise and in the end, we come to a decision that we both feel was ours to begin with.”

Santos also noted that even if they do get into serious conflicts, they know that it isn’t anything personal and so they eventually just re-align their goals to stay on track. People are afraid to enter business with family because the relationship is at stake, but she said that this was the very reason they dared to in the first place. Being emotionally tied together and having that bond that withstood years is what made them equally passionate about their business.

BUSINESS IS BUSINESS

Finally, keeping it professional has to be the most underrated and difficult thing to uphold in doing business with family and friends. Humans are highly emotional by nature and so mustering the strength to separate the personal from what’s purely business is tougher than it looks. Working together with someone you’ve been with for a good couple of years, or perhaps your entire life, might lead you into having some personal biases, even grievances.

“I think the most important thing about working with family is that you need to keep it professional at all times. Knowing when to talk personal matters and when to talk business, and trying as much as possible to not let the two overlap, are essential to running a business with your family,” said Ana Lorenzana of the Wildflour Group.

She acknowledges the differences in her family, pointing out that their varying perspectives and outlooks are actually a strength of their business. There isn’t only one way to solve a problem and because each individual is a product of their own personal experience, there’s more solutions and ideas being brought to the table.

These two entirely different things will get mixed up at some point but it is up to the business owners to set their priorities straight—it is what’s expected of them, anyway. Running business with family shouldn’t always have to be something avoided to the point of almost becoming a taboo. A lot of the most successful and established global businesses today thrived on familial relationships and has continued to flourish through the years. Once the perfect balance on personal and professional life is attained, a family business is on its way to a bright future.

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