Many small businesses are owned by more than one member of a family. Sometimes this is simply to reap the tax benefits that such a structure offers but often it is with a wider vision in mind; perhaps a father wishes to bequeath the results of his hard work to his children, maybe siblings with similar work interests decide to go into business together to secure their futures.
Whatever the drive for creating a business in which more than one member of the same family is a working and contributing member of staff, director and / or shareholder such businesses undoubtedly come with a unique set of features and often challenges.
As many of you will be aware I have been a director and shareholder in a family owned business. I’ve also worked for other successful non family owned small businesses as well as large organisations, so I’ve witnessed first hand some of those differences. First of all there’s a shared history; when you work for a big company what’s the chances of the boss having been at the receiving end of your teenage rebellions? Or been party to them? And how do such experiences influence your family member’s expectations of you as an adult at work? Then there’s the emotions; no doubt linked to the shared history but for example how do you fairly share out profits with a sibling who you feel always got more parental attention than you, even when you know they’ve worked twice as hard as you in the last year when you were busy with personal projects? Is this the time to get even?!
These issues and challenges can of course be overcome but it takes honesty and trust. I believe that in a family business more than any other it is important to agree the following throughout your time in business:
Boundaries: who is responsible for what? How will any financial or other outcome be split?
Expectations: what are the long term goals for you and the business? Is it about work / life balance, financial results or something else entirely? Ideally all your goals should match.
Communication methods: what needs to be communicated? How will it be done i.e. in a weekly meeting, email updates etc
Dealing with crises: all businesses face a crisis at some point. How will you cope when it happens to you? How will you communicate then? Who will be responsible for what?
It can be useful to ask a third party to help address those issues, as they can see the situation more objectively than someone who’s personally involved. They could help at start up phase or work frequently with you throughout the life of the business.
If these and other issues that are personal to your individual setup are acknowledged and addressed before they become the elephant in the room your family business has as much chance of any other of succeeding. When it works it’s fantastic; then the shared history becomes invaluable, your intimate knowledge of each other becomes a real strength and the support you can give one another is heartfelt and meaningful.