Family-owned Businesses: Recollections, Memoirs and Lessons Learned (Part 2)

by Mayra Ruiz McPherson on February 17, 2011

Family Pictures from Father's Day
In my last blog post, I shared my own personal story about my experience in sharing a business with an immediate family member: my husband.

I’ve personally known several husband-wife business owners who have been quite successful. I guess I thought my husband and I could co-manage and co-own a business jointly as well.

But I learned rather quickly that, in my marriage, this kind of husband-wife collaboration was not meant to be.

I appreciated some of the comments shared with me once my blog post was published last November; a handful of my women peers and friends informed me they, too, would not have been able to work with their partners or husbands without either duking it out or even filing for divorce!

Wow, I thought.

It really does seem to be a hit-or-miss kind of situation and that each couple — or each instance where you may consider going into business with any family member beyond your spouse — should be carefully considered before you embark on such a journey.

I once knew a CEO who owned a very successful business with his wife.

In relaying his own thoughts about owning a business with his life partner, he shared a tidbit of advice he had received from his closest peers who also co-owned businesses with their spouses.

“Designate one room in your home where you are open to discussing business,” they told my CEO friend. “And in that room, talk all the business talk you want. But once you step one toe out of that room, all subjects related to business are (and should be) 100% forbidden.”

My CEO friend said this piece of advice from his colleagues had proved to be quite helpful. “It was instrumental in containing business conversations to a minimum in our home,” he shared. “Putting this advice into play helped to keep the conversations as ones between husband and wife vs. employer with employee.”

In researching this topic more with others beyond my social and professional circles, I discovered that many who have attempted to operate a business with a family member have quickly learned this kind of dynamic can create unique challenges.

Sometimes, the challenges are too great to overcome.

Other times, the challenges are difficult but the rewards of collaborating with a spouse or loved ones are, for some, also well worth the risk.

Take Gita Malinovska, owner of Dublin, Ireland-based Agile Technologies Limited, an IT services firm specializing in web development.

Gita shared some great points on the pros and cons of working with her spouse. On the positive side, Gita loves working with her partner as it gives her the ability to be with him 24 x 7.

“When I worked regular job hours, my husband kept missing me,” said Gita. “I used some sick leave days to spend some time with him. But now I can go to school plays without problems. Our free time is flexible; when we need free time, we just take it.”

Despite how freeing having flexibility can be, Gita acknowledges there are negatives too. “Sometimes, it feels as if you are always at work,” she explains. “Even when you go for a walk you keep returning to work topics, and can’t really stop doing that.”

Christina Radisic, an SEO consultant from the UK, has a more optimistic view point when it comes to working with her spouse.

“I’ve found it very rewarding running a business with my husband. Far more rewarding than working for anyone else. With any relationship and business, as long as the partners are focused on the same path it should work well and smoothly.”

Debbi Stumpf, an events and social media marketer from the greater San Diego, California area also shared her insights on the subject of working a business with husbands and family members.

“I grew up in a family-owned business, as did my husband, so it was only natural that we were in business together when we got married. One important thing I learned, by watching my parents and through my own experience is that the relationships with the family members are more important than the business.

“It’s easy for the lines between work and home-life to get blurred so it’s important to have some time to separate out the two;  time when it is just family and time when the business is center stage. It cannot be both all of the time.”

Clearly, there is a recurring theme in these stories: despite the challenges of co-operating a business with an immediate family member, it is vital to carve out non-business time to preserve healthy boundaries and relationships.

Tips on working with family members

Don Dressler, Principal and Legal Counsel at Small Biz HR in Orange County, California, sheds some light on important factors to consider when working with family members.

Specifically, Don emphasizes the need for preparing for what he terms as the three D’s. “Having worked closely with a number of family businesses, I have noticed they often don’t want to think about (a) the disability of a family member, (b) the possibility of divorce and the emotional and financial toll it can take, and (c) the death of a spouse or loved one.” Don adds, “Each of these must be considered and planned for.”

[emphasis mine]

While Don’s three D’s are key points to consider, Ohio-based Senior Business Advisor Frank Kozak also warns about a family member’s commitment level to the business.

“An issue I see often is the differences in capabilities and commitment of the family members. This can result in significant inequity for the top performing individual. Additionally, as I’ve seen happen with a few of my clients, the President of a family-owned business has had to either dismiss or demote a loved one due to poor performance.”

What would Frank advise under such conditions?

“Based on my observations,” says Frank, “I would recommend avoiding the hiring of family members, and at a minimum, sharing of ownership.”

Frank’s recommendations are both pragmatic and reasonable. But for those who dream of co-owning a business with their spouse, the notion of not sharing ownership or not working with a loved one is perhaps unrealistic.

In the end, couples who dare go down the joint-entrepreneurial path will inevitably be faced with many of the challenges and rewards shared here.

And after having experienced working alongside my own husband in a co-ownership environment, I know all too well that things don’t always have fairytale endings.

What do you think about this subject and some of the ideas and tips shared here?

Are you working with your spouse or an immediate family member and, if so, what’s your take on issues regarding commitment levels or defining boundaries? Your ideas, comments and suggestions on this topic are welcome.

More from Women Grow Business:

Image: Theodore Lee via Flickr, Creative Commons

Mayra Ruiz is founder of Ruiz McPherson Communications, a social media influence and digital marketing service based in historic Charles Town, West Virginia. With more than 15 years of hands-on marketing, communications and PR experience, Mayra leads her clients forward on all aspects of creative direction, online promotion and marketing communications with innovation, passion and gusto.  When offline, Mayra enjoys “old fashioned” non-techy stuff like cooking, sewing and collecting vintage treasures from area antiques stores. She can be reached at www.twitter.com/mayraruiz or www.twitter.com/ruizmcpherson (her marketing practice).

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