Mixing Family and Business

There’s a well known saying, which is expressed in a variety of ways, but essentially boils down to the simple statement:

Family and business don’t mix.

However, in recent months, I’ve witnessed cases where family and business truly don’t mix, and other cases where it was perhaps because of family involvement that the business was such a success. Certainly, no two cases are exactly alike, but perhaps with this article, some of the issues will become clear, and you can judge for yourself.

Why should you mix?

Perhaps before dealing with the reasons to avoid going into business with members of the family, it is necessary to understand why people might choose to go into business with family members.

  • You already know the people, so it’s unlikely that you’ll be surprised by unexpected behavior. This predictability can help hold a business together when two random people might have fallen apart.
  • You’re all in it together – there is often with family members a desire to succeed as a family unit, as opposed to each partner being in it for themselves (whether or not they act that way is a completely different story).
  • They’re available – families will often stick up for one another, so raising capital, or getting a critical introduction can often be facilitated through members of the family.
  • Your family will stick up for you, often even when you haven’t earned it yet.

Why you should stay away?

This is actually the easier question to answer:

  • You have to deal with these people all the time, so it makes it hard to turn off the business and turn on the family life, and the same applies in reverse.
  • Failures will likely haunt you for the rest of your life, especially if a family member loses money on your venture.
  • Customers will find that if they have an issue with one member of the family, they are less likely (though still possible) to get a satisfactory resolution from another member of the family.
  • Conflict resolution can be nearly impossible.
  • Dealing with a member of the family slacking off can often destroy a business by either creating too much fighting within the business, or allowing the slacker to stay because they’re family.
  • Nepotism is rampant in family-based businesses, as the name implies.

Which should you do?

If you’re debating working with a family member, make sure that you would want that person as a partner even if they were not related to you. Also, ensure that you can maintain a division between work life and family life, and that you have in place a means to resolve conflicts, which will arise (it’s not a question of if, but when, and over what).