How to succeed in business with family members
Family members can be great people to start a business with. That’s certainly true for Sunita and Sunil Nigam, who created the Solo Expenses expense manager app. But it might not work for you. Here’s some advice about creating a firm foundation for your family firm, and to avoid it becoming a family failure…
According to the Victorian nursery rhyme, Jack Spratt and his wife were complete opposites. He could eat no fat; she could eat no lean. Which probably makes them the perfect couple to be in business together since, as the rhyme goes on to say, between them both they licked the platter clean.
But it isn’t always so for families in business. Sure, there are hundreds of examples of successful family firms, but many don’t succeed. Just because it’s family doesn’t mean it’s harmonious; we don’t choose our families, but we can choose to go into business with them. Or not.
Had Mr and Mrs Spratt done so, they would probably have succeeded. I’d like to think they would have been able to work together in harmony, each bringing their own strengths to the table to create something larger than the sum of its parts.
But you might not be so fortunate. And that’s why, before embarking on a business venture with a family member, you should ask yourself some tough questions before you get in too deep.
Rip off the rose-tinted specs and get real
Rip off the rose-tinted specs. You need to know if you’re in this for the same reasons, and that the vision is shared. You need to know how the whole thing will be financed, and if you’re sharing that burden equally. If you’re not, why not? Will the rewards be shared in the same proportion? You need to know what everyone involved will contribute to the company, and what they expect to get out of it in return.
And what of the future? Would you eventually like other family members to take what you’ve created and develop it further, or do you want to sell the company, buy a yacht and sail off around the world on the proceeds?
If you plan a business venture with a sibling, take a new look at their personal lives. Do they share your values? Just because they’re a sibling doesn’t mean the answer will be ‘yes’. Think of the people who don’t get along with their brothers and sisters; we all know some of them.
Sunita’s recipe for family business success
Sunita Nigam, who created the Solo Expenses expense manager app with her husband Sunil says the recipe for family business success, or for working with close friends, is to ensure that every member of the team has skills that are unique, complementary, and add value. Commenting on the web here she says: “The reason why everybody has joined hands is because at the end they expect a payout. Quarrels and discontent happen when people don’t deliver their part of the bargain.”
For the team working with the Solo Expenses best expense manager app – which is as global as the company’s client base – the trick has been to find ways of having fun; to manage expectations, and to document deliverable properly. “This latter one is important,” she says. “It ensures everyone understands the task, and is almost as important as one final point: making sure communication is always of the best. Poor communication can lead to disagreement. That’s bad enough in business, but when it spills over to personal lives as well, it becomes a disaster.”
Making strangers closer than family
And geography has no part to play in picking the right people. Sunita and Sunil work together as the couple at the heart of the money management app, but the team they have surrounded themselves with is truly global, just as the client base. They’ve picked people who work together well in spite of being separated by huge distances. And that approach has turned strangers into friends close enough to be the right kind of family members to be in business together.
Has the approach worked? Solo Expenses has customers in more than 90 countries; so that would be a resounding ‘yes’, then…