Severing Business and Family Ties at the Same Time

Introduction

It’s a familiar cliché: you can choose your friends, but you cannot choose your family. For most people, this truism is a given. But for those who work in a family business, it’s not always that easy.

Some are born into it, inheriting the generations-old family business of their forbearers. Others may choose to start a business with a sibling or even a spouse. There are clear benefits to both.

Trust is key in business, and we tend to trust nobody more than our own flesh and blood, or someone with whom we have such deep bonds, such as a spouse or life partner.

Going into business with family lends a sense of comfort in knowing who we are dealing with, what drives them, and how best to communicate with and motivate our family member turned partner.

However, as with any business, things can go wrong. Visions clash, goals change, and industries turn. Walking away from a business can often be difficult. Walking away from a business and a family member at the same time can feel near impossible.

Where the Problem Lies

It is unreasonable to expect family members not to experience conflict in business, explains the Family Business Consulting Group. Most people who venture into starting a business often set up systems for managing a wide range of risks.

One of these risks includes the danger that partners, directors, or other stakeholders will not always see eye to eye on some issues, and may even experience significant losses of cohesion or trust.

In family businesses, as Marleen Dieleman points out, this type of risk planning is often missing. Trusting our family as we do, we are blindsided if things turn sour down the line because more often than not, we have not prepared for it. In the same way that people hardly ever get into a marriage with the expectation that it will fail.

The best way to deal with a problem is to anticipate it. If you are thinking about creating an LLC with a family member, for example, it is very important to treat your relationship with your business partner the same way you would with any other non-family member.

Unlike entering into a marriage where divorce is horrible to contemplate, the beginnings of a family enterprise require a responsible approach to the worst case scenario.

Frank discussions are needed, and it is probably a good idea to have a business attorney involved from the outset and to make sure this is a person who can gain the trust of all the family members involved in the business.

To this end, a well-drafted operating agreement fully equipped for potential disagreements and even fallouts between business partners is an absolute must.

Of course, many people inherit their family business or have the reins passed down to them. Others work under the tutelage of their parents with the anticipation that they will take over the reins in due course, with the weight of expectations that come along with that.

Even with careful planning, there is no guarantee that you can avoid the eventuality of wanting out of the business.

Writing on 14 pros and cons of starting a business with family members, Ryan Robinson warns that infighting within families relating to succession battles is one key and often unique source of conflict.

Add to this that feelings of being rejected, slighted or undervalued in your job are all the more disappointing when a family member is the source of your discontent, and it is not hard to see why leaving the family’s work nest is so often a necessity.

Severing Ties the Right Way

Family members tend to let feelings fester, but it is important to confront issues head-on and as quickly as possible. As in all familial relationships, honesty is the best policy.

Business always brings rivalry. Harry Levinson explains that the family business bring with it the added dynamic that we so often experience in our closes relationships: guilt.

In “Conflicts that Plague Family Businesses,” Levinson explains that the hostility so often experienced by business subordinates is compounded, where the family is involved, by the subordinate second-guessing the validity of their own hostility.

One can easily hate one’s boss, but one might feel quite horrible about doing so where your boss is your father or your nurturing older brother or sister. The best way to go about it is to approach your family members about the problem.

If your ultimate goal is to maintain the good relationship you have outside of your enterprise, then it is perhaps best not to rush off to do or say something hasty, which might have the effect of damaging both the business and family relationship.

If you must leave the business, then be open about why you feel it’s time for you to get out.

Confronting the Inevitable - Sometimes Things Just Don't Work Out

Though you may take all the right precautions, sometimes a situation is beyond saving. In that case, your own sense of self-worth, your health and sanity, and even the long term sanctity of your family relationship may be best served by cutting your losses.

Hard as they may be to confront, do not let unresolved disputes sit too long. Although you may be dealing with those closest to you, business is business, reminds Jean Murray, an expert with a Ph.D. in small business management.

In business as in life, hard feelings tend to build up if left unresolved and can manifest in unhealthy behavior. If honesty has got you nowhere, it may be time to recognize that your relationship with your family member might take a long term knock, and to accept that.

Let your family partners know why you need to sever the working relationship, why the family is still important to you, and what you will do to ensure that the transition is as smooth as possible.

Make sure that your family knows that they and the sustainability of the business are important to you and that you will put in place the necessary succession plans to reduce the effects of your exit.

Your family may take some time to heal, but you will be able to always fall back on the fact that you played your cards honestly and openly, and use that as a platform for rebuilding trust and goodwill.

Ultimately, the truth is that leaving your family business requires an open and upfront discussion, best efforts to ensure that those remaining are happy with the circumstances of your exit, and a willingness to let time mend the immediate feelings of negativity that may follow.

Bio

Kanayo Okwuraiwe is a startup founder, an incurable entrepreneur, a digital marketing professional, chess lover, brother, son, friend and more. His latest project has seen him create a digital marketing agency called Telligent Marketing that provides lawyer SEO services to help attorneys grow their law practices.