Beware pitfalls of working with relatives
March 16, 2009

It is difficult enough to find the perfect match for a business partner, and even more difficult when that person is a brother-in-law, your parents, or even closer, your spouse. From the 35 percent of Fortune 500 family-owned businesses to the "mompreneurs" changing diapers between teleconferences, America’s family businesses account for a staggering 50 percent of the GDP.

Last year, many mom-and-pops had to worry about Wal-Mart and other large competitors. This year, throw in credit crunches and crippling fear, which limits innovation and growth. According to the 2008 Small Business Mid-Year Economic Report from the National Small Business Association, a trade group, 67 percent of small businesses have been impacted by the collapse of global credit markets brought on largely by the bursting of the U.S. housing bubble. More than ever, family-owned businesses, new and long-established, have to have great relationships within to survive every business decision.

When I decided to go into business with my husband, the challenges were overwhelming. He initially welcomed the "free help" at first, ready and willing to teach me what I needed to know to succeed in the predominantly male-oriented residential building business. It took nearly three years to figure out how much of the business I wanted to learn and what the new line of responsibilities would be for both of us. At that point, when it was time to expand and open a warehouse, I took on the design, trimming out the spaces, building and installing the cabinetry, and laying the tile. All along the way, he wanted to know if it was being done the right way, realizing now why I wanted to know more than he felt like I needed to know, and worrying about my safety. Whether it’s expanding a business location, diversifying into a new product line, or the painful downsizing of employees, sometimes it takes a major change for the partnership to mature and be successful.

Fortunately, with a lot of work and attention to your relationship, family-owned businesses can often survive less than favorable economic trends better than large corporations. Whether you are thinking about starting a business with your spouse or another family member, taking over the family business, or just trying to change some unproductive habits, here are some key areas to consider:

1) Build relationships with vendors and employees, defining and communicating your own responsibilities to them. Your vendors and subcontractors can support your business in more ways than doing work and selling you products.

I used my vendors and subcontractors to train me, and they were happy to do it. When I started handling construction on the site for our homes and renovation projects, at first they would say, "Have you spoken with Mark about this?" but eventually, with a lot of assertiveness on my part, I developed excellent relationships with them. Employees as well do not need to be confused as to who they go to for direction, solutions and their individual needs.

2) Set a time when you will not discuss work. At that point each day, you should not talk about any projects, the business financials or employees. Otherwise, business will dominate every conversation. Additionally, when it comes to business-related discussions, respect your partner and call to schedule time to meet, or block out certain times during the week for meetings. Remember that each of you has an agenda already for the day, so treat your business partner just as you would a non-related partner.

3) Don’t carry your personal lives to work and don’t carry your work to family members who are not involved in the business. It is only human to have strong emotions with the people we know best, but asking questions like "Are you mad at me?" on the job is inappropriate. Address those moments during a private business discussion, and be sure that if you do slip and allow your personal life to show at work, that you are not encouraging your employees to be nonproductive, naturally, during all the commotion.

Additionally, when your other family members want to hire you or buy products from you, you may want to sweetly say no. Most families have a handful of people who will nitpick and accuse their relatives of doing something wrong, such as delaying a delivery to serve another client because they are family.

4) Ideally, your values need to be the same and although they may not always have equal attention, each of you has to be willing to support efforts to change the behaviors that undermine the business culture. One of most important values that partners must have is providing customers with quality work. It isn’t always easy for us, as it may mean more cost to the company, but both of us always ask ourselves, "If this was my house, would this be acceptable?"

Every business is different, but determine what the tolerance level is for quality in your field, and then decide your work should be a notch above that.

Another important value is upholding trust and a strong work ethic. Neither of us has to doubt that the other is pulling his weight. Even if one partner makes a mistake, there should be no question that he or she has put 100 percent effort into the work.

Just as critical as it is on any management team, you also have to respect differences. When we first started in business together, it took my husband awhile to adjust to my productivity schedule.

Staying up all night, during hours when I am often the most creative with designs and solutions, meant that I was not managing my time to my husband who is often on a job site at 5:30 a.m. and finished working for the day by 3:30.

Identify what those differences are in the way you work and adjust to benefit both of you.

These are just a few tips for keeping a healthy relationship in business with your partner. Find out what is not working and fix it as your focus in this economy has to be a united effort. If the home business tempts you to both work when you should be taking off, move the business out of your home.

If you need to start talking about succession planning with your children, do it so you don’t make any assumptions, and so that if they are interested, you are getting your heirs what they need to succeed.

Spouses or other family members, beware that the worst reason to go into business together is to be together more. You have to be in a career that both of you absolutely love or running a family-owned business will be some of the worst years you ever spend working.

Tanya Bullington is co-owner of Elizabeth Anne Design Studio and Bullington Builders, a licensed home builder in Hampton Roads. Bullington can be reached at 721-7272.

Resource: Inside Business
Bullington Builders is a custom home builder and home contractor that specializes in custom homes, women-centric homes, room additions, kitchens, kitchen renovations, bathrooms, bathroom renovations, and remodeling for clients in Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Hampton, Newport News, Eastern Shore, and Hampton Roads (Tidewater).