Mixing Business and Family
This is my site Written by Alora on August 2, 2010 – 10:00 am

For some families, business is just part of the package.  As someone who grew up in a family-owned business, one of the reasons I ducked-and-weaved every time my husband used to bring up the idea of us owning our own business was because I saw a lot of headache (and heartache) as a result of mixing business and family.

Eventually I stopped fighting the inevitable, but I remain constantly aware of the fact that my husband and I have two very different relationships: one as spouses and one as business partners.  And there is no way to avoid the fact that there are times when the needs of one relationship create tension in the other.

A post on Forbes, When Siblings Don’t Pull Their Weight by Gene Marks, showcases an example of how one family business found a resolution to some of these challenges: a set of three siblings bought the family business from their parents, and eventually ran into a problem because one of them wasn’t pulling their weight.

The solution Gene discusses is rather clever, but it’s a long-term solution.  In my experience working with family-owned businesses, there are two common challenges that surface in situations like this:

Avoidance. This was, predictably, part of the pattern Gene discussed in his sibling example: the problem festered for quite a while before a solution was found, because no one wanted to rock the boat.  Everyone was afraid of upsetting their parents and generally causing family strife, so the two siblings who were carrying the heaviest burden of the business avoided saying anything for as long as they could stand.

Urgency. Often this becomes an issue because of avoidance — though it can also be a matter of size.  The longer you avoid a problem, the more likely it is that it will get worse until you have no choice but to deal with it.  And usually, by the time that happens, you’ve got a much bigger mess on your hands than you would have had if you’d handled it sooner.

Small businesses in particular are often cursed with tight enough living conditions that too big a crisis can quickly sink the entire ship.  One of my clients owns a business with his wife, and after a few years of growing it, they decided to bring her daughter in to help run the daily logistics.  The idea made sense for all concerned, and so they got started.

Unfortunately, over time, the daughter’s idea of “a full work day” did not jibe with her step-father’s.  Since the point of bringing her on-board was to off-load as much of the burden from the parent’s as possible, the fact that they were shelling out an enormous percentage of their revenue to pay her salary while not seeing any real reduction in the number of hours they were putting in started causing a problem.

It didn’t take long for my client to get very frustrated: his wife was responsible for managing her daughter, but she didn’t want to be the bad guy.  Unfortunately, she didn’t want her husband to do it, either.  Relationships all the way around quickly grew strained, until the point that family events were palably uncomfortable for everyone.  The situation went on for more than two years before outside circumstances intervened, and the daughter left the business of her own accord.

Now, while they still maintain the same workload as they always have, their financial burden has dropped by more than 20% since they no longer have to pay her salary.  In a small family business with extremely narrow operating margins, that 20% has been a huge relief.  But the real problem was avoided, instead of resolved.

Working with family presents a set of challenges over-and-above the normal assortment that comes standard in most small businesses.  Earlier this year at Austin’s South by Southwest Interactive conference, I asked Wine Library‘s Gary Vaynerchuck about his experience joining (and ultimately taking over) his family’s business.  My specific question was how they all got through it without hurting each other’s feelings.

His answer, of course, was that they didn’t.  He said they constantly hurt each other’s feeling in the beginning, and it took a long time to make work.  But the important thing was always to remember that, no matter how hard it was to integrate their different styles into a rational working relationship, they were family and they loved each other.  They wanted to work together, so they just kept trying until they got it to work.

The answer is different for every family.  Some businesses are too delicate to withstand the turmoil that comes with family strife; other businesses may be too delicate to withstand replacing a family member.  The only real key is to find a way to be honest and don’t fall into the avoidance trap.  It’s possible to be honest about difficult issues and still be kind.  But the longer you let something fester, the harder that becomes.

The old saying, “Bad news doesn’t get better with age” holds true here: if you keep something bottled up, eventually you’ll explode.  It’s bad enough to have a fight with someone you love.  But the last thing you want is to wait until it’s so bad that your business can’t bounce back.

So remember, bite the bullet, be honest and remember that they are your family.  Working together may not be the solution you had originally hoped for, but I guarantee, your holiday dinners will be much better if you don’t have to rely on the lawyers to intervene when it’s time to pass the cranberry sauce.

(This post is part of my Entrepreneur Evangelist series and was originally published on WorkingPoint‘s Small Business Blog.)