Getting into business with your loved ones might sound like a dicey proposition, particularly when you look at the statistics. Roughly 70 percent of family-run businesses don't make it to the next generation. And in the event of failure, you have more than your immediate family to worry about.
I experienced this fear firsthand in 1999, when our business was bought out in a hostile takeover. Because it was a family business, we had four households without jobs and 16 mouths to feed — not to mention loyal employees who’d been with us from day one.
But that reality gave me the drive to pick myself back up. When I started the business again, there was no question who I wanted beside me. We’re now operating a successful international company with more than 160 facilities across North America, and I couldn’t have done it without my family.
The winning advantage of family businesses. Despite the potential risks, the chances of making a real go of it with family are better than those ventures not kept “in the family.” As of 2012, the failure rate for startups was estimated at 75 percent, so setting up shop with a sibling, cousin or spouse is not so ill-advised.
Look at it this way: No one else knows you as well as your family, and there’s little risk that your new business partner will pull up stakes and move cross-country just as the business gets off the ground.
You also know how to motivate and inspire one another, and you have built-in trust that no amount of money could buy.
But family-run businesses don’t come without their own set of challenges. Before partnering with relatives, you must understand how to translate your separate visions for a business into a united front.
Here are a five things I’ve learned from running a family operation:
1. Identify strengths. Determine exactly what knowledge and skills each person can contribute to the business, then accept those strengths for what they are. If you’re terrible with numbers but your brother happens to love bookkeeping, just be happy that you’ve got your bases covered.
2. Set clear expectations. Knowing everyone’s strengths will help define roles in the organization. Who’s in charge of marketing? What about hiring? Are you better suited to handle operations or close business deals? No matter where the responsibilities fall, set expectations and establish boundaries for each role. You don’t want someone playing in your sandbox when he’s got his own.
3. Be flexible. In a perfect world, we’d each have one job to do. But being an entrepreneur is another story. You need to be willing to offer help when needed, even if it’s outside your comfort zone. You will make mistakes, but staying flexible and being unafraid to try new things will make you more resilient and ultimately benefit your business.
4. Use every excuse to keep learning. Five years from now, your job won’t look like it does today. If it does, you probably didn’t take enough risks. To manage the change inherent to startups, learn the next thing, the necessary thing, the trendy thing and, of course, the harder thing.
5 Never take work home. I’m a strong believer that lunch is for work and dinner is for family. When your family gathers for celebrations, make them about family, not business. Other members of your family don’t necessarily want to hear what happened at your last meeting, so don’t subject them to business talk.
Starting with clearly defined roles and the readiness to do what needs to be done to succeed, you can build a healthy family business without messing up your family dynamic. As long as everyone knows what he or she is responsible for, there should be no hard feelings outside the office when someone is asked to step up their game.
Trust is the foundation of any successful business relationship, and there’s no one I trust more than my family. When you combine the power of your different skills and channel your love for each other into your business, you’re setting up your company to win.