Starting a business with family makes sense on paper. You often know these people better than anyone, you can be extremely honest, and your relationship is set up to withstand significant pressure – all good qualities in a business partner. But research shows that only about 30% of family-led businesses survive into the second generation. How can you ensure your business makes it?
Close relationships can give you a competitive edge…
When Suwar and Berfin Mert's parents arrived in Sweden as political refugees from Kurdistan in the eighties, it was always their aim that their eight children remain extremely close. Now the brother-sister duo are co-founders of packaging-recycling app Bower, despite their six-year age gap. ‘As siblings we can be totally honest with each other, in a way that friends or colleagues cannot,’ says the younger Berfin, also the company's chief operating officer.
Tip: Learn to argue well. Although being frank means there are rarely any misunderstandings, founding the app together helped Berfin realize that it's important to be sensitive to everyone's feelings – even if they are your older brother's. This realization has made her a more effective co-founder, because she's been able to minimize time spent on conflict. According to Suwar, running a business has helped the duo better understand that their relationship as siblings will always be more important than their relationship as co-founders.
… but setting boundaries is key.
Brothers Josh and Jason Chapman co-founded Colorado-headquartered Konvoy Ventures, an investment firm that helps fund early-stage video game companies. Early in their journey, they had a disagreement over bringing their first employee on board, when one of them wasn't comfortable with the hire. ‘We proceeded anyway and the hire ended up being a distraction to our vision,’ says Jason.
Tip: Learn to compartmentalize. To make sure business conflicts and disagreements don't impact their relationship, the brothers agree that compartmentalizing is vital. They do this by being clear when they're talking about a professional issue and when they're switching back to being just brothers. ‘Without the ability to separate these spheres, your work might seep into your personal life and become draining, or your personal interactions could affect your efficiency at work, leading to a lack of productivity. It's a fine balance,’ says Josh.