MENU
component-ddb-728x90-v1-01-desktop

Family 411: Risks of going into business with family

Risks of going into business with family (WSYX)

COLUMBUS, Ohio (WSYX) - Nike, Volkswagen and Walmart are at the top of the list when the talk turns to family-owned businesses.

It is estimated as many as 90% of American businesses are family-owned, according to the Small Business Administration. However, there are risks along with the benefits to consider before going into business with loved ones.

Michael Pappas has been working with his parents in a family-owned diner for thirty years.

Michael says he does it all, from scheduling to social media, even filling in at the grill. “I got a phone call this morning that one of our cooks wasn't here, so I had to get in here a little bit earlier,” said Michael.

Michael says, sometimes family co-workers can get caught off -guard by unforeseen character flaws. That could spell disaster for some companies. But Michael also says he understands his father's personality. “It sounds great and when it works it is great,” said Pappas. “For us it works really well.”

Tommy Pappas’ dad worked for the post office in Greece but he had his own plan to start a restaurant in the United States. “This is my dream, this is what I enjoy,” said Tommy. “This is what I like.”

The Pappas' were adamant their boys would go to college before committing to the business, though.

Some families automatically assume children will want to take the reins. “Them not pushing me towards it played a big role,” said Michael. “They gave us the freedom to make our own choices.”

The SBA says families who work together need to deal with discord from time to time, but not let disagreements impact the business.

Tommy admits things can get hectic and stressful. “I scream and I yell at people,” said Tommy with a laugh. “Just sit down.”

“I think he knows how to light my fire a little bit sometimes,” said Michael. “And vice versa.”

Not all families are cut out to work together, though.

Conflicts can create rifts between family members, so care needs to be given to keep from damaging relationships.

The SBA says rule number one: home life should be left at home when the work day starts.

Tommy admits in the beginning they had to figure that out. “My wife, she would take the problem home and she, all day, talking about it,” said Tommy. “And one day I said, ‘You know what? What goes in the restaurant stays in the restaurant, we are at home now, we have got to enjoy life,’” said Tommy.

It's important to develop a clear business plan when working with family. Communicate clearly and often with family and non-family members, too.

Tommy says respecting one another is a top goal. “They got to communicate,” said Tommy. “Now, if you go: ‘this is my decision.’ Doesn't work that way. You give it, you get some.”

A family-owned business has a special brand and part of the success can often be tied back to the family appeal.

“This place is home to me for almost thirty years,” said Michael. “It is something my parents built. Getting to see them every day, we have a really good relationship.”

The SBA says, if you are unlucky enough to have hired a family member who can't make any useful contributions to the company, try to identify potential skills and possibly ask a non-family member to mentor the challenging employee.

close video ad
Unmutetoggle ad audio on off

Trending