In that corner of your brain a phrenologist would label Dreams Unlimited, you’ve been thinking that it’s time to realize that long-held vision to work for yourself. You’ve put in a solid two decades in the workplace. You’re seasoned, experienced, and if college-going kids haven’t broken the bank, you just might have put aside a little nest egg for launch. Your spouse has complimentary skills, or maybe one of those kids you educated is a marketing and social media whiz
Now’s the time, you think, yet you hesitate, worrying about friends’ family businesses that have failed, or relationships that have foundered on the rocks of commerce. Take heart from the fact that your dream can go big: nearly one in 5 companies in Fortune’s Global 500 are family-run, a 4% uptick since 2005.
To help you decide go-no go, here’s the straight skinny from somebody who did it right. Business writer Meg Hirshberg’s husband, Gary, launched organic yogurt juggernaut Stonyfield Farm in the early 1980s. She worked for the company for years along with other family members and went on to write For Better or Work: A Survival Guide for Entrepreneurs and Their Families. Here, her pros and cons of owning a family business. See how they stack up for you.
Public perception. “With a family business, there’s an assumption of quality and caring. You’re not seen as doing it for a buck; it’s about pride. You’re in it for the long game.”
Legacy. “A family working together for a common cause is a beautiful thing. It’s a gift. There’s a passing of a baton, not just in a business sense but also in terms of learning and wisdom. It can help knit families together in a wonderful way.”
Trust. “Nobody has your back like your family.” That said, Hirshberg recommends bringing on independent advisors or a neutral third party to help with crucial business and financial decisions to keep those good vibes flowing.
Prioritizing. Business trumps family. This can be a tough pill to swallow. “One business consultant I interviewed said that if you don’t make decisions based on the welfare of the company, you won’t have a company to worry about. Most family businesses fail because personal relationships don’t work out—there are misunderstandings.” Other pitfalls: Onboarding a child who doesn’t really want to work for the company but feels obligated, favoring a child who does work for the business over one who doesn’t, or harnessing the free “help” of a spouse who ends up feeling resentful. “My husband would suddenly convert into business mode, and I was like, ‘Excuse me?’” laughs Hirshberg. “It takes a special type of person to be able to compartmentalize.”
Boundaries. “Family business owners can tend to conflate a business relationship with a personal one. People assume that if things aren’t working out in the workplace, oh my God, you don’t love each other, which is scary. Don’t equate the two.”
Too many cooks. It’s hard to control for quality once the family tree gets unwieldy “You don’t see many third- or fourth-generation businesses for a reason.” But there are ways to make it work: Hirshberg points to Lundberg Family Farm, a multi-generational business with strict rules: Twice a year, the extended family unites for a fun retreat, like wine-tasting or a baseball game. “By the time the cousins took over, they already knew and trusted one another.”
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