Being in business with a partner presents its own unique set of challenges; when that partner is family, however, the dynamics and complexities increase considerably. My father was in business with his older brother for more than 30 years. I still remember conversations around the dinner table where he urged me to go it alone if I ever decided to get into a business. His frustration originated from two common fundamental tradeoffs in family businesses – a lack of autonomy regarding business decisions and a lack of transparency into the portion of the business lead by his brother.
Nevertheless, even though it was difficult at times for my father to work with his brother, in hindsight he proclaims the business would not have been successful without him. His primary reasoning was they shared the same vision, they each had unique and complementary skills, and their shared responsibility helped to alleviate the burden of owning a business.
Those aspects are certainly important but I believe the truth is much deeper than my father depicted or even realizes. This is perhaps due to his family’s nature. I am certain the underlying core reason their business partnership was successful for 30 years was the same reason that motivated them to go into business together in the first place – family values and trust.
As an advisor to closely held businesses I have seen the very best and the very worst of what occurs when mixing family with business. Being an advisor, candidly I am called upon more frequently for the latter. As a result, I catch myself building up skepticism regarding mixing the two. That said, I do on occasion run into family businesses where trust and family values are at the center of their relationship and I am reinvigorated. I am not declaring that these values are all that are needed to run a successful family business because they are not – but when I think about all my experiences of dealing with family businesses it is those who demonstrate these two attributes that are always the more successful.
Next time I will address a very important topic– the decision of transitioning a family business to the next generation. Stay tuned, and as always I hope to hear from you with comments/questions.
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