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 different levels of risk tolerance or entirely different goals.
Yet this isn’t an either-or point of contention. It’s a question of proper navigation through the aid of 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 business, everything needs to be set up properly. A business can’t run solely on passion—you also need to understand certain legalities. It’s important, as business partners, to have legal contracts. You can’t just suddenly shift roles in the middle of operations. 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 organized, you might want to handle accounting and finances while your partner works on marketing and promotion. Achieving this balance is ideal in any venture. Being specific and clear about responsibilities will help manage expectations from the beginning. Try to address as many concerns as possible before they even happen and prepare the necessary contingency plans.
“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,” says 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, there is something that holds the business together. It would be best to get a lawyer or legal advisor to facilitate the formalities. 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 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. But conflicts are inevitable.
The art of knowing when to step back is more complex than you’d think. If you make a mistake, own up to it, sincerely apologize, and propose a resolution. Saying sorry would help fix unsettled things with your partner and yourself. But if the other party fails 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 your working relationship. Clear out some headspace before discussing things and then 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 notes that even if they do get into serious conflicts, they know that it isn’t anything personal so they eventually just realign their goals to stay on track. People are afraid to enter business with family because the relationship is at stake, but Santos says 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 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 number of years, or perhaps your entire life, might lead you into having personal biases, even grievances.
“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,” says Ana Lorenzana De Ocampo of the Wildflour Group.
Lorenzana De Ocampo acknowledges the differences in her family, pointing out that their varying perspectives are actually a strength. There isn’t only one way to solve a problem and because each individual is a product of their personal experience, there are 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 a business with family shouldn’t always have to be something avoided to the point of almost becoming taboo. Many of the most successful and established global businesses today thrive on familial relationships. Once the perfect balance of personal and professional is attained, a family business is on its way to a potentially bright future.