Best practices to consider when working with relatives.
Canada has a rich history of generational family businesses, from century farms to favourite neighbourhood diners serving up decades’ worth of good eats. Through the years, many families have worked shoulder to shoulder carrying on a proud tradition, with parents, siblings and sometimes even grandkids all pulling together for business success.
Starting a family business and keeping it going over the long term takes a lot of grit and determination, and a healthy dose of compatibility. If you’re considering starting a small business with family, it’s important to think long and hard about the pros and cons, including managing finances, roles and responsibilities, as well as strategies for keeping conflict to a minimum.
Melissa Steele is co-owner of Ontario-based small business Gold Leaf Botanicals, which specializes in all kinds of tropical plants, including some rare varieties. Two years ago, she made the decision to take the small business plunge along with her brother, his partner and a close family friend.
“The idea for a tropical plant business came from our collective frustration in trying to find quality plants to buy for our home,” says Steele. “The plants we’d buy often died quickly because they hadn’t been well cared for, and there also wasn’t much variety available to choose from.”
The company began as a home-based online service, but quickly expanded into a storefront location.
“It was an online store for about four months, and then we decided to go brick and mortar,” says Steele. “The house I share with my brother and his partner has a lot of great natural light with optimal conditions for taking care of plants, but we just ‘grew’ to the point where we had hundreds of plants lined up in every room, down the hallways, and every nook and cranny. So we decided that we needed to look at getting a store.”
Today, the business offers a range of services that includes home delivery and plant rentals.
“We now rent tropical plants out for special occasions, which can be a very cost-effective option when you consider some can cost $300 to $400 to buy,” says Steele.
It’s been a whirlwind two years of business growth requiring teamwork, open communication, well-defined responsibilities and continuous learning.
Roles and responsibilities
“Starting out, we all had the passion, but none of us had a business background, so with that came a big learning curve,” says Steele. “An important first step was determining who would do what by leveraging our individual strengths.”
Plant care, wholesaler relationships and customer service became the responsibility of the two business partners with greenhouse experience, who also had a passion for teaching others about proper plant care. Social media and website design fell under the domain of the partner with tech design expertise, and financials were handled by the partner skilled in spreadsheets and mathematics.
And while work roles are well established, flexibility is still an important component.
“We know our core responsibilities while maintaining an ‘all hands on-deck’ mentality when extra help is needed,” says Steele. “Our web design partner is mainly focused on technical, marketing and social media, but if we need help watering plants, he drops what he’s doing to pitch in. At the end of the day, we all have that mentality of doing whatever it takes to help each other out.”
Good communication is the cornerstone of all successful relationships, especially when you’re in business with family. It may not always be easy to speak up, but failure to do so can lead to misunderstandings, conflict, unclear direction and general discord.
For the team at Gold Leaf Botanicals, regular, honest communication has been an important part of their business routine from day one.
“It’s pretty typical for all of us to meet at the store on a Sunday for a face-to face-roundtable,” says Steele. “We regularly discuss next steps for the business – tabling ideas for expansion into new locations, as well as new revenue streams.”
Everyone is given the opportunity to express any ideas or concerns in a safe environment, and all decisions are put to a vote.
“The close relationships can certainly make things challenging at times, and we don’t always agree,” says Steele. “But we try to ensure that our communication with each other is open, honest and candid. We don’t sugarcoat things – we just say what we feel. And sometimes things are tabled for discussion later, when timing might be better.”
Voting on decisions helps to separate the personal from the professional, and every effort is made to ensure the team looks at things from each person’s unique point of view. “Our web design partner often brings interesting insights into the conversation that the rest of us can’t see because we’re too close to the idea,” say Steele.
Lean on experts
Having a product or service that fulfills a need in the community, combined with lots of hard work and dedication, is essential for a thriving family business. But part of the formula for success is knowing when to extend beyond family ties to tap into expert advice.
“Early on we realized that we needed outside advice, and today we strongly rely on a team of professionals, small business coaches and mentors,” says Steele. “We’ve also tapped into our local small business centre, which offers great programs, services and connections with other small business owners to learn about challenges they’ve faced and their strategies for working through difficulties.”
Part of the service provided by the small business centre was assistance in creating a business plan.
“Creating a business plan was a really important element, and we went through the process while we were still an online-only business,” says Steele. “We had to think about what kind of financing we would need, the type of structure we wanted for our business and who would be responsible for what. We did all of this planning early on with help from our business coach, which helped us to establish clear processes and guidelines.”
Other valuable external resources include access to financial and legal services.
“Make sure you have a good accountant in your corner to help manage the books. We’ve learned how important it is to have a good lawyer available to review contracts, and our advisor helps us to review the overall health of the business, that we have a solid investment plan in place and that we have the right insurance coverage.”
Operating a family business is challenging, but also incredibly rewarding. Having a solid plan and the right experts in place can help to ensure a successful launch and growth for years to come.
Additional small business resources are available here, on topics that include taxes, succession planning and fraud prevention.