Going into business with family

Hi everyone,

I wanted some advice. I am in the process of opening up a business in the coming months. My mother recently expressed she would like to be part of the business and my father didn't want anything to do with it which is perfectly ok with me.

We decided upon going 50/50 with my mother for start up costs and whilst I will be doing most of the work, as my mother doesn't have the skills for this business at this stage there are somethings that she can do for the business - so we chatted today and i told her that the tasks that are within her capacity to complete. She said she was happy to do them.

Then behind my back I over hear her talking to my Dad telling him that I am selfish - that if it was her she would be prepared to do all the work and give me my share of profits and more.

Then she said she is not treating this business as an investment - she is just doing it for something to do.

She also told my father that I am the type of person that would rather help others than her. She is already causing drama even before we have started!!

I can't help but feel now she is going to bring so much chaos and negative energy to this business that I am not sure i want to into business with her anymore.

Am i being unreasonable?

If you look at things dispassionately, it sounds like your mom is probably a lovely lady who cares about you but does not have any business acumen and that is leading to problems.

To her, she wants to be your “partner” because she wants to help you out and be part of the business. She wants to be involved. And of course, own part of the company. It’s not an “investment” because she isn’t in it for the money. She is using these terms colloquially.

You are thinking of these terms in the true business sense.

In business, a “partner” would own a part of the company but would bring equal value to the table. An “investor” would bring money to the table in return for either a part of the company or a return on investment or both.

I mean, technically you can make her an unqual partner... for example, you own 80% and she owns 20%.

... but I think the real problem here is that she does not appear to have business acumen to understand this and also that she does not have great communication skills to be able to tell you her desires and expectations.

Really, she just wants to help you out.

I do think that it’s probably best not to go into business with her. I think this is a path to a lot of hurt feelings and misunderstandings.

I’m not willing to say that this is a sweeping generalization about whether it’s a good idea for anyone to go into business with family... sometimes it’s a fabulous idea... but everyone really has to be exceptionally clear about everything and very much on the same page.

I don’t think this is the case with your mother and I think it would be a long hard road to get her there.

If she is putting up 50% of the start up costs, then she is a 50% partner. You are not her boss. You will have to respect her investment and treat her as the 50/50 partner she is, including her input. Or give her money back.

We decided upon going 50/50 with my mother for start up costs. i told her that the tasks that are within her capacity to complete.

Agreed re: she’s putting 50% up, so she does not become your employee but rather a true partner.

See a lawyer, and get all tasks, responsibilities, structuring, etc. in writing.

Don't do this. She's already got negative things to say, and she's not even addressing her concerns with you, she's complaining behind your back (specifically complaining ABOUT YOU already!!!). This is going to be a nightmare...

As a person who has had a business with family I would say DONT DO IT. Familial bonds don’t usually create good business.

I agree with everyone above and I have personal experience with a family business, which I am now trying to plan an exit strategy for. It feels almost impossible to get out of it, but I have to, because I agree with you all. It can be toxic.

Unlike your business with your mum (50 / 50) - I am basically an employee, but I am doing all the strategy, all the planning, not all but most of the stuff (like marketing) that will help the business to grow, and I feel like she has become so reliant on me, that today when she told me that she wanted to put Uber on her phone, and I said she would probably need to update her phone she said to me 'You will have to sort that out for me'. ???!!!

It just makes me feel so incredibly sick. I feel like it is incestuous in a way. Obviously not in a sexual sense, but there is something not quite right about this picture, and even though it has made us closer in a lot of ways. I don't feel that is actually doing ME any good. Distance and separation are important in every relationship.

The problem is that she would be completely lost without me, so it is going to be a significant challenge to actually get out of this arrangement. That is one comment I have heard others say. In family business, once you are in it, it can be so hard to 'get out of it'. So be careful OP.

As my Mum is a bit of a control freak and loves to do the menial stuff like pack boxes (and she can't even give up control of packing a ****ing order, it does my head in), our staff do not take a lot of initiative. I am going to have to think long and hard about what I can put in place, but I feel like at the end of the day, this is not my problem. This is actually her business, and I don't feel like it is up to me to drive myself into the ground to make it succeed.

First thing is never ever do business 50/50. Someone has to have deciding power or else you will get into never ending stalemates. At best do 51/49. Consider also long term plans. Will you need more funding? Will you need to take on additional investors or partners? It won't work if your business is already 50/50. An existing partner can easily tell you that no they will not dilute or split their ownership, which means any additional investment will have to come out of your share, which will then take away your decision power. These things are critical to think about and can be even worse with family involved than with strangers. You are already getting a taste of it.

I disagree with those saying she isn't your employee, you don't get to tell her what needs to be done. Quite the contrary. In a partnership situation, partner tasks and responsibilities absolutely must be clearly defined and put in writing and signed off on. If the partner doesn't deliver, you also need to have it in writing that the partner can be removed from the business for not pulling their weight. Even if the partner's contribution is purely financial/investment type - again needs to be spelled out in writing what rights they do and don't have in day to day business, what expectations they have of an ROI, financial reporting, major business decisions such as sale, etc.

In your particular case, I'd also beware of the fact that your father wants nothing to do with this. Your mother and father are not separate entities. Every time your mother is unhappy, your father is liable to remind her that she shouldn't have gotten involved. Even if not intentionally, he will fuel her negative energy because he himself didn't want this and her unhappiness affects him.

If I were you, I'd thank her for the offer/interest and walk away while you all still get along, respect each other. and nothing catastrophic has happened to tear your family apart. Unfortunately, getting into business together can strain even the strongest of families, let alone a situation where there is no consensus or common vision for what this business involvement is all about.

You put yourself in this predicament by allowing your mother to have 50% of your business. If you don't like her being involved, give her money back and tell her you want your stake in the business back. Otherwise you're gonna be stuck in this predicament forever.

As Chai's post points out, there are boundary issues everywhere. Boundaries constantly at risk of being threatened, communication that may be loaded even about the simplest things. Imagine if Chai and mother were not in business together -- Chai would happily help her mom with the phone apps, but when requested in the context of everything else, it feels over the top. When I was in a family business, I learned a lot! I made zippo. I used the flexibility it afforded me to sort myself out, and got another job when I was able. I was displeased with the way the business was managed, the way people managed their time, and exited rather than confront those issues.

The business comments about 50/50 are accurate. A financing source or significant vendor may challenge you on that structure, wondering who has final say and how do you resolve a standstill. A 50/50 structure is often a way to avoid addressing the true power dynamic. When that is the case, that is evidence from the jump that this is a bad idea.

Finally, when in business with family, we often avoid socializing with family.

All told, bad idea most of the time.

My husband and I own an online business that is doing extremely well this year, we are making more money than we ever have in the past thru any endeavour. Our son is into marketing and he helps us and has been useful in many ways. His main contribution is assembling part of our product, he does this once a week, which is fine. However he often comes here in a bad mood with a worse attitude thus making me miserable and often angry. My mild mannered husband has had about all he can take. Son will get loud and assert himself into things that dont concern him and he's gotten me mad enough to tell him to go home and come back another day.

I honestly want out of our biz and to remove the current stress I am under. Son doesnt know how to do what I do but he could learn. He cannot do what hubby does as he is colour blind to a degree and seeing colour properly is essential so hubby cant walk away like I can. Unless we close the business which we dont want to do. Ideally I'd like to sell son my part once he gets a sum of money he is inheriting.

So, to get back to the original topic, I say dont do it. Give your mother her money back and do the job yourself. It's that simple.

Husband and I got along fine with this business until son got involved and it's been hard ever since. I do NOT recommend going into business with family, it's just about impossible to fire them and not ruin your relationship with said person.

I think you're writing in here because you know what you describe is trouble. Your mom should not be part of the business unless you pay her as an employee. You should also not allow her to invest in the company. You can take out a loan from her with a signed agreement on when you will pay her back, but if she's already bad-mouthing you, the business sounds doomed. And you're only going to get in arguments when your mother will want money from the business and she won't believe you're not making money yet. Don't go into business with mom. And even borrowing money from her might not be a good idea.

Oh hell no. Even if it weren't family, it looks like a bad idea. She doesn't see it as an investment, 'just something to do'. And the fact your father is not on board and they are a married couple has trouble all over it too.

How do you know that she said any of these things?

Beware of pot stirrers.