8 Ways to Make Working with Family Members Profitable and Fun
As I mentioned in a previous article, there are plenty of reasons to love multi-generational startups. Working with younger family members or acquaintances can give you access to complementary skills, new financing options and diverse perspectives. But, what about the downsides? Is it possible to work with family members without damaging your relationships or letting emotions derail your business?
Based on my experience with Boomerly, I have seen firsthand that working with family members can be profitable and fun. At the same time, building a business with someone you care about on an emotional level requires careful planning and constant monitoring. Here are 8 tips for working with family members, while keeping your sanity intact.
Don’t Work with Anyone in Your Family Unless You Believe in their Skills and Experience
One of the most important success factors of any business is the quality of the people that you hire. If anything, this is even more important when working with family members. Ask yourself, “If I was not related to this person, and received their resume, would I be excited to work with them?”
As with so many aspects of working with family members, formalizing the hiring process can be beneficial. You don’t have to conduct an “interview” in the conventional sense. But, sitting down and having an honest discussion about each person’s skills, experience and personality can help to identify any potential issues.
You may have a great relationship with your son or daughter, but, how much do you really know about their work style? Do they like to make decisions based on hard data, or, gut instinct? How have they dealt with difficult situations or failures in the past? Why are they interested in this particular project? Now is the time to ask.
Take an Honest Look at the Strength of Your Relationship and Communication Style
Just because you have a positive relationship with a family member does not mean that you will be good business partners. In fact, sometimes having a certain level of detachment can be a positive thing. The question is not whether you like spending time together on a personal level. It’s a question of whether you respect each other and are able to deal with stressful situations calmly and professionally.
Think back to the last argument that you had with your potential business partner. Did it end with slammed doors and tears? Do debates that should be based on logic tend to disintegrate into an emotional mess? If so, you should think carefully about whether you are ready to work together.
Set a Trial Period for Working Together
Once you have taken an honest look at your partner’s skills, experience, personality and communication style – and they have done the same for you – it is often helpful to establish a trial period before formalizing your business relationship. In my experience, a month is usually long enough to get a good idea how you will work together.
During this time, make sure that both parties have specific objectives that are tied to measurable outcomes. Not only will this give you an opportunity to see how the other person works, but, it will also give you help you to evaluate your communication styles.
Divide Roles and Responsibilities Cleanly and Put them in Writing
So, you’ve completed your trial period with your business and sanity intact. Congratulations! Now the real work begins!
One of the biggest causes of tension in a family business is a lack of clarity regarding roles and responsibilities. In any startup, there is bound to be a certain amount of “everyone doing a bit of everything,” but, that doesn’t mean that you’re off the hook for setting objectives.
During this stage, be explicit about assigning functional ownership. For example, who will be the ultimate decision maker when it comes to marketing, operational, financial and partnership decisions? Are there certain decisions that you will make together (for example expenses that exceed a certain amount)? Every minute that you spend on this process will prevent arguments in the future.
Use Context to Separate Work and Family Activities
Context is important in every aspect of human life. Whether we realize it or not, different locations and cultural situations have a big impact on how we behave. One of the challenges with working with family members is that our professional and personal environments are mixed. How will you separate work from family when your living room is your conference room and your kitchen is your cafeteria?
The trick is to use context to your advantage. If you will be working from the same location, is there a room that you can dedicate to the company (this is also good for tax purposes, but, that’s another topic.) If you will be working separately, can you agree on office hours when you will both be available to talk? Are there certain times or locations that you will agree to leave free of business conversations?
Using context to separate work and family activities will help ensure that conversations stay professional and your business gets off to the best possible start.
Apply a Positive Frame to Differences of Opinion
When it comes to working with a family member from another generation, differences in perspective are both a major challenge and a significant opportunity. Throughout the process of establishing your business, you will encounter disagreements ranging from the tactical (which color to use on your logo) to the strategic (whether to move forward with a strategic partnership).
At times, you will both feel like the solution is “obvious” and you won’t understand why your partner “just doesn’t get it.” At these times, it’s important to remember that both perspectives have value. Try to dig below the surface. Ask the other person what assumptions they are making. Let them explain the logic behind their recommendation. Together, you have a better chance of coming to an optimal business solution.
When you feel your emotions rising, ask yourself, “how would I behave in this situation if we were both working for another company?”
Agree on “What Ifs” Up Front and Get them in Writing
Everyone feels positive at the beginning of a business venture. Sadly, not all business relationships end as well as they start. If you have followed the advice in this article, you should have a better than average chance of maintaining a strong relationship with your family member while building your business. But, what about the “what ifs”?
What if one of you decides that your personal obligations no longer allow you to work on the business? What if your partner is offered a job that they just can’t refuse? What if you both just decide that working together was a bad idea? Who owns what in the case that one or the other party walks away?
This is another aspect of working with a family member that is best addressed up front. Don’t wait until there is a problem to start planning for these contingencies. At a minimum, take the time to discuss these potential issues and put a written agreement in place. Then, put a partnership agreement in place. There are plenty of free templates, but, it makes sense to check with an attorney to get all the details right.
Remember to Have Fun Once in a While
Finally, once you have decided to work together, don’t forget to have fun once in a while. Have your weekly strategy meetings in the park. Have a monthly brainstorming session, complete with oversized paper and lots of pizza. Separating your work and professional activities is a good idea, but, don’t forget to enjoy your time together. You’ve earned it!
Have you worked with a family member in the past? What did you learn from the experience? Please join the discussion and “like” and share this article to keep the conversation going.