6 Challenges for Family Businesses (and How to Overcome Them)

Consider these six tips before you start a business with a family member.

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By Adam Toren

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Being an entrepreneur obviously comes with its fair share of challenges. Add family to the management mix, and those challenges can be multiplied or divided, depending on the relationships involved. While we've heard horror stories around families involved in business together, I can't imagine my entrepreneurial journey without my brother Matthew. In our case, being family has only enhanced our success.

But, family can bring up some unique obstacles too. Here are six common challenges as told by family businesses -- as well as how to overcome them.

Establish boundaries.

Jennifer Jackson is VP of Development at Hungry Howie's Pizza. Her father, Steve Jackson, is CEO. Jennifer is passionate about her role at her family's company -- she says the community-oriented values she shares with her dad give Hungry Howie's a competitive edge -- but it can be tricky to establish and maintain boundaries when she's working alongside someone she loves.

Related: 11 Habits of Truly Happy People

"When in a discussion, it's very important to understand which hat each person is wearing: father, daughter, colleague, V.P. or President," Jennifer says. "When I returned to the family organization in 2012, I was very insistent on creating boundaries. I remember being in my dad's office when a conversation would switch from professional to business. I would say, "Call me after 6 PM so we can discuss,' and walk out of his office. He would not be happy when I did this, but I wanted to ensure we didn't head down that road of boundaries crossing over. We both make a conscious effort today."

Know your role.

Jorge Cruise is a celebrity trainer and the author of The Three Choices. His husband, Sam Cruise, is his creative director. "When working with your spouse, there can be a tendency to slip out of your own lane," says Jorge. It's a bit like setting boundaries, but it's also a matter of trusting that your business partner will do their designated job (and vice versa).

"Holding fast to your role and constant communication will ensure smooth sailing. The most important tip is to schedule white space in your calendar. It is imperative to have time to yourselves and to protect your schedule to have necessary downtime to reset and recover."

See things from different points of view.

Brothers Alon and Guy Ozery are the co-owners of Ozery Bakery. Alon states that while many people warned him against running a business with his brother, working with family is "like a roller coaster" -- fun and challenging at the same time. There are times when they disagree, of course, but Alon and Guy ultimately respect each other's opinions and value each other's differing points of view.

"We are deeply and -- at times -- brutally honest with each other," says Alon. "Many times, people hold back their opinions from the people they're working with at risk of hurting someone's feelings, but we're way past worrying about things like that. When problems arise, we get to the core of the issue and solve it together."

Battle resentment.

Young Lee, CEO and founder of The Flame Broiler, works closely with his son, Daniel Lee, the company's Marketing Manager. One occasional challenge the family members face is resentment. "The biggest piece of advice we have for families looking to go into business together is to never do anything that would create resentment or impact your personal relationship," says Young. "We struggle coming home after work and falling back into business mode instead of spending quality time with one another. Because of this, we designate dinner a business-free zone so there are no conflicts."

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Young and Daniel also use the "sandwich method" to deliver constructive criticism that ends on a positive note instead of making the other party upset. Young begins "by focusing on strengths, then providing feedback on areas of improvement, and lastly reiterating the positive, as well as what they can expect by making the change."

Don't forget to have fun.

Husband and wife Ben and Tamara Arbib own Rebel Kitchen, a brand of healthy coconut milk-based beverages. They often fall into a trap many entrepreneurs face -- working so hard they forget to have fun.

"It's easy to make everything about the kids or work and forget about you as a couple. Ben initially had huge reservations about working together because he worried it would come between our marriage, but to be honest, any startup is taxing on a marriage and we're so grateful we get to do this together," Tamara says. "Make time to not talk about work. Remember to laugh and not take it all so seriously. The journey is long, you have to enjoy it along the way."


My brother Matthew and I have co-owned several businesses over the years. We're lucky to never feel alone in business; no matter what's going on, through good times and challenges, we at least know we have each other's back. But with family, you might think you know each other so well that the other person will always know what you're thinking. This is a mistake that can cost businesses and damage priceless relationships.

Related: How to Start a Business With (Almost) No Money

Before going into a venture together, it's critical that expectations are clear and voiced freely. Spell everything out and be very specific about what each person's role will be, what each of you will get out of it, and how you'll make decisions moving forward. You don't want there to be any room for misunderstandings.

Adam Toren

Serial entrepreneur, mentor, advisor and co-founder of YoungEntrepreneur.com

Adam Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Matthew, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Phoenix, Ariz.

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