Choosing a partner for starting a business can sometimes be stressful. It is important to find someone whom you have trust, good communication, shared mindsets, aligned visions and similar worldviews. Previously we spoke about the pros and cons of founding a startup with your best friend, and now we are going to explore the pros and cons of founding a startup with your family.
On a side note, my co-founder is my father and I have experienced the feeling of this is the worst decision I’ve ever made and the feeling of this is the best decision I’ve ever made. What has helped us move forward is to define and frequently review the roles, responsibilities, and who takes the final decisions on certain domains. Another tip I could share from my experience is that you must identify and address the emotional tensions before moving forward with conversations and decisions, to avoid personal conflict.
So let’s see what are the pros of starting up with family:
1.- Common Core Values
Having strong core values becomes a competitive advantage for your business because core values support the vision, shape the culture and define the essence of the company’s identity. Most likely you’ll share strong core values with your family and when you start a business together, the values become stronger giving you an extra edge towards shaping the identity of the company allowing it to run smoothly.
2.- Communication
Communication is key to every good relationship and this is also true for business relationships. Many family members have found a way to communicate effectively, in exactly the way that a businesses could benefit from. However, this is a tricky one because when conversations go the wrong way everything can go to bad places, breaking up relationships and businesses. One of the most important things when founding a business with family, is to address emotional and personal feelings soon to avoid friction and future problems.
3.- Loyalty and Strong Commitment
Building a business requires a lot of commitment in hard times and good times. A great perk of starting a business with your family is that you’re more likely to invest extra hours and effort needed to reach your goals. Also the key people are more prone to make sacrifices for the success of the company, which also relates to strong loyalty between the founders, who are more likely to stick together in harsh situations and show the determination to accomplish the shared goals.
4.- Lower Cost Staff
The salaries and wages for staff can be take a big chunk from the company’s budget, but luckily for family businesses, the staff is more willing to make financial sacrifices for the sake of the business. It is more likely for family members to accept lower pay than they would get elsewhere, to help the business in the long term or during a cash flow crisis. This can be beneficial for the early stages of a business or even when things are not going as expected.
5.- Appealing for Customers
Customers’ relationships with businesses are based on trust, and for many customers the fact that the business is family owned is appealing. They understand that strong core values are shared, loyalty and strong commitment drive the decisions, and this translates into building trust for them. Family businesses are more likely to satisfy and understand their customers’ needs and happy customers drive the business towards success.
6.- Leaving Legacy
Many founders think about the possibility of creating long lasting legacies through the companies we build and when partnering with our family, it becomes a bigger incentive to put our names into that legacy. We create the possibility of making a family legacy that will last for future generations.
Now let’s evaluate the other side of the coin and explore the cons of starting up with family:
1.- Conflicts
Businesses can generate situations where conflict arises and when your partners are your family, disputes can mix personal and emotional situations. This creates a lot of friction for the business, slowing down progress and requiring the involved parties to engage in difficult conversations which can last for weeks depending on the situation. It is extremely important to resolve conflicts as soon as possible to avoid future unresolved issues and reduce friction that slows the progress.
2.- Favouritism
Businesses require making decisions with objectiveness and family members can easily forget about this when working together. For example, who gets hired for a role or gets promoted, should be a decision based on who is more fit to develop the role and take the responsibilities. However, making this decision when family is involved can sometimes be difficult. as favouritism might arise. Another example is when outside employees feel the favouritism and take sides, avoiding offering feedback in fear family members might get offended. A great tool that helps to reduce favouritism, is to use numbers and indicators for making decisions and making sure every employee feels equally comfortable with sharing their thoughts.
3.- Emotional Labour
One of the greatest challenges we face as Founders is the emotional labour we must endure when starting and running a company, dealing with our fears, anxieties, sadness, and stress, which can easily get in our way to reach our goals. When working with family things get a bit more difficult, because there is an additional layer to the emotional labour from the relationship between family members. Achieving peace with this situation requires a lot of effort and patience, but when the work is done results are worth the effort.
4.- Life events
Even though life events occur sometimes without any previous warning, it is important to think about death, divorce and incapacitation, which are situations that could potentially destroy your businesses. Family members and also co-founders often face the risks of enduring those life events. This is why it is important to take some time to discuss the possibilities and define a plan of action for those types of situations.
5.- Generation gaps
In my personal experience this has been one of the hardest things to manage while working with my father. There is a generation gap which sometimes makes our worldviews too different. When starting a business with family, take into consideration that different generations with different experiences choose to take risks and analyze decisions in different ways, which most of the time can raise opposed perspectives and possibly conflicts between family members. A great strategy that has helped us manage the situation is to agree on the methods of evaluating risks and decisions, which should aim to remove any emotional and personal influences.
6.- Power Struggles
It is difficult to separate life and work when someone from your family is your business partner, sometimes family roles can mix with the business roles, leading to a pre-established chain of command which if changed or challenged might raise power struggles. We’ve managed those situations by separating and clearly establishing the family relationship with the business relationship. This has not been easy but it pays off in the long run.
If you missed our article on the pros and cons of founding a startup with your best friend, check it out as well for some more perspective.
via https://www.AiUpNow.com/ by contact@bcurdy.com, Khareem Sudlow
