This month’s question
What are the benefits and drawbacks to working in a family business?
It’s said that the family that plays together stays together. But what about the family that works together? The small catalogers we contacted this month, all of whom work or have worked with spouses or relatives, point out certain challenges: avoiding favoring family members over nonrelated staff, for one, and making sure family members pull their own weight. But many also say that working with family can bolster their personal relationships.
Larry Woodward is general manager/CEO of Dogwise, a Wenatchee, WA-based catalog that sells books and other merchandise for dog owners. Annual sales, about $2.5 million; annual circulation, about 350,000.
I run the business with my wife, Charlene. The freedom and flexibility you have in a family-run business is great. And if you do it right, it can really help build a good relationship, especially between spouses. Once you get past the child-rearing age, it’s almost like a shared hobby.
On the other hand, working in a family business can be tough for the other, nonfamily employees. They need to know whom to talk to. A lot of family businesses just wing it organizationally, and I think that can create confusion for your employees. When we had our first employees, there were times when an employee would ask me something and, if he didn’t like my answer, would go to Charlene – just like kids do. We really had to establish who had decision-making authority in the company.
Dick McWilliams is president of Harbor Farm, a Little Deer Isle, ME-based cataloger of home furnishings. Annual sales, more than $1 million; annual circulation, more than 100,000.
My parents, my wife, and I run the business together. I’m the president, but I certainly spend a lot of time listening to and acting upon the advice of my mother, or my wife, or my father. My parents have extensive business backgrounds and have held senior management positions in the automotive and advertising industries. So they bring a lot of hard experience in many areas to the company.
The trick is each of the players gets to do something that he or she knows and is good at, so that everyone is satisfied with what he or she is doing. My wife is very good at finance. My mother is good at advertising and product promotion. I’m a people person, and I sort of make things happen. My father is a product person, but he’s also a marketing guy. So we all do these different things, and then collaborate on projects to move toward a common goal.
Andrea Rideout owns Dallas-based Nostalgic Warehouse, a catalog selling vintage door and cabinet hardware designs. Annual sales, about $1 million; annual circulation, approximately 50,000.
Generally when you hire family, you can trust that they’re not going to consciously cheat you. I think that’s one of the biggest benefits.
But family members can rip you off subconsciously. They tend to take more advantage. They’re more likely to call in late, take time off, and so forth. If you’re working for someone else, you don’t tend to do those things as easily. But as a manager, it’s hard to say no to your brother or sister.
There also can be a power struggle when you have family working in the business. It’s hard to say, “I am going to have this policy about such and such,” when your mom is peering over your shoulder saying, “Do you really want to do it this way?” It’s harder, when you diapered that person when he was little, not to question his authority in the business.
It’s also difficult to let a family member go. I hired my brother a few years back when his business was not doing very well. It was obvious to me very quickly that it was not going to work out, but it took me three months to finally say so. Of course, by then he was very upset, and so was I. If he’d been someone off the street, it would have been easier to ask him to leave.
Eleanor Edmondson is president of Bas Bleu, an Atlanta-based book cataloger. Annual sales, $6 million; annual circulation, more than 4 million.
I started Bas Bleu about five years ago. At the time, my husband, Charlie Edmondson, was in the process of selling Charles Keath Ltd., a gifts catalog he founded, to The Mark Group. Charlie is now in graduate school pursuing a Ph.D. in economics, and he works with me, but it’s not the traditional mom-and-pop business where a couple works together day to day.
In this business, my strengths are primarily in driving the concepts of the catalog. I’m an avid reader and also a good copywriter. I also like motivating people, so I’m a fairly good manager. Charlie’s expertise is in the financial area and the nuts and bolts of the business.
The drawback of being in business together is that it’s hard when you have a conceptual difference about something. Both in Charles Keath and in Bas Bleu, it has not been an equal partnership between us, and I think that’s what’s helped, because one person has always had the final say.
Dan Vaccaro is president of The Printers Shopper, a catalog based in Chula Vista, CA, that sells printing and graphic arts supplies to printers, artists, and desktop publishers. Annual sales, $1.5 million; annual circulation, more than 250,000.
My wife and I work together, and although we have a wonderful working and personal relationship, at times it’s difficult to separate business from our personal life.
In general, family members are harder to deal with than other employees. You have to deal with a parent, a sibling, a spouse, or a child in a different way, because it’s not only on a business level, but also on a personal level. And we have to set an example for nonfamily employees. Family members, while they deserve some consideration, are still employees of the company and have to pull their weight. Otherwise you can cause nonfamily employees to have bad attitudes. Besides, most family-run business aren’t cash cows. You can’t just expect to show up and draw a paycheck. You have to contribute to the success of the business.
I think the major benefit of running a family company is that you’re working for yourself, and so you control the business. You have the opportunity to make or break your own situation.