Can This Family Business Relationship Be Saved?
It isn't a soap opera, but it's a typical family business sage, that I heard last week:
A newly graduated professional wants to join the firm owned by his father-in-law and brother-in-law. The father-in-law has a very old-fashioned way of running his business. The brother-in-law didn't get any breaks from his father and he doesn't think the new guy should either. Of course, we have a wife/daughter and a couple of kids in the picture.
Mixing family/friendship and business almost never works out. Sure, I've known some families who have been successful in working together and living together, some for long periods of time. But when things go bad, as they often do in this situations, it's the personal relationship that suffers. And that's sad.
When the new grad came to me for advice, I gave him some suggestions:
- Communicate Expectations
There should be a family discussion in which each person should explain what he/she expects. Included in the discussion should be expectations about how long it will continue, what role each person will play in the business (employee, shareholder, partner?), and expectations of pay and benefits.
- Decide on a Business Type to Protect All Parties
If this is an ongoing business, the new person should be given a legal contract or legal paperwork showing his her status. It may be time to change the type of business form to accommodate the new person.
- Put All Agreements in Writing
Grandiose statements like, "You're family and we'll take care of you," can be the prelude to the end of a relationship. I have no clue what that means, and I certainly wouldn't rely on it. Make sure all understandings are written down and put in an agreement that has been reviewed by an attorney.
- Keep the Business and Personal Relationships Separate
Don't talk about family stuff in the office and don't talk about office stuff at home.
If you have been involved in a family business and you have a story to tell, or advice for this family, please comment here or use the forum. Any advice/information/comment is welcome.
If you are in a position to hire family or friends, you might want to check out a column I wrote in a professional publication a couple of years ago about this subject.
Comments
Family businesses absolutely requires written agreements. Currently, my brother-in-law works for my father and he is unbelieveable irresponsible and desrespectful to my parents (pretending he knows it all). Now, my father is ill and both my parents are still treated inappropriately by my brother-in-law. I’m not involved in the business, but I feel that I must protect my parents and get involved. My one and only sister makes excuses for my brother-in-law. It’s a terrible situation. I wish my parents had the forethought to document business responsibilities and strict job responsibilities so that this wouldn’t be such a mess.
Thanks for the comment, Sue. I’m sorry your family has to go through this. You are correct that having everything documented is the key to making this type of relationship/business relationship work. I hope the situation improves, for everyone’s sakes.