A Family IT/Tech Business??

adzoox writes "As I have just hired on my girlfriend to help out with some secretarial work in my Apple consulting, sales, and technical service business, and considering having my brother work with me soon; I'd like to know what the /. readers think about family in the 'Tech Workplace.' Obviously things aren't hectic like a restaurant, but my father and friends have all warned me against mixing business and pleasure and family. Do any of you have successful family owned IT businesses, eBay businesses, or programming/software consulting engineering businesses and what's been or secret to success? If not successful what unique problems did you encounter? How can I make it successful? And most importantly how do you handle authority (tardiness, work ethic, and workplace codes) with a girlfriend?"

Comments

Careful planning

[BWJones]

Oh, dude. You are opening yourself up to all sorts of abuse from the Slashdot crowd, but I will try and make some constructive comments to head off any noise.

I have worked in the past with family on a couple of businesses ranging from molecular modeling and pharmacologic development to health care and real estate and I can tell you sometimes it works and sometimes it does not. You will simply have to find out by jumping in, but make sure that everybody understands that running your own business is hard work. Just in case you did not get that: Running your own business is hard work. Sorry to repeat myself, but I have seen the attitude more than once of people saying "Hey, I will start my own business and it will be cool. I can set my own hours, etc...etc...etc...", but many folks have no idea how complicated or difficult it can be. Beyond your knowledge of the work involved, everybody else in a small start up or small company will have to have strong work ethics, some luck and some insight into the market you are looking at working in. Get yourself a good CPA to do quarterly taxes, have regularly scheduled (but short and concise) status update meetings, and decide before you go in, which people are going to accept which responsibilities. Also, be aware that starting your own business can occupy all aspects of your life including your moment to moment thoughts and difficulties can arise if everybody involved in the early stages does not have the same vision.

Also, I don't know what your relationship is with your girlfriend, but both of you need to establish right from the start whether or not she is an employee or a partner, and you need to decide for your relationship what the future (if any) holds in terms of marriage. Even long term live-in relationships can have "common-law" implications, so if the business takes off, but your relationship does not, how are you going to deal with that? It might also be prudent to establish early on what the investment shares are as well. Who "owns" the business? Is your brother going to be a partner or employee?

Re:Careful planning

[LostCluster]

If you marry her without a prenup, she will suddenly get ownership of half of the business. If that's okay with you, then you really don't have a problem. However, if that scares you at all, you need to make it clear that she's being paid as an employee and that's all she's getting out of the company.

However, on the converse, if you make it clear to her that she's getting an ownership interest in the company, she'll have more interest in the quality of the work, and she might be willing to accept lower wages today for the good of the company in the future... since company profits and her own spending money will be very closely related.

Re:Careful planning

[TheViciousOverWind]

I've worked with a girlfriend in "software development" - One man company, she acted as a sales(wo)man.
The problem is that when everything goes great, there's no problems, but if she suddenly decides to go shopping instead of working, you can't help but have negative thoughts about it ("Why doesn't she put in as much work as I do?"), and ultimately those thoughts will affect the normal relationship too, you can't just seperate those 2 things.

Also I were put in a situation where my (ex)girlfriend told me she found some new customers, just to make me happy, because I was feeling depressed one day, and I later found out that she had not even talked to them.
Of course this is more of a trust issue, but I found that mixing business and pleasure on a full-time scale, was definately not the way to go for me.

Must have separate roles

[fembots]

In my experience, it is important to have clearly defined, separate roles for each person, so that there will never be overlapping in terms of who does what.

One problem I had with family members is, it's actually more difficult to void your opinion because you still have a "outside" relationship with that person beyond work.

So the best way is to do different things in the business, as long as everybody has a common goal/mission.

Re:A few pitfalls come to mind

[TrentL]

3. What happens if your girlfriend, God forbid, breaks up with you? Can you handle seeing her at work, knowing she's not your girlfriend anymore? The reverse is also true, she could resent you. Have a reasonable employment agreement for this. Be generous up front and you'll save legal fees down the road.

I think this is the biggest risk. Not only will you have to remain on good terms with your girlfriend, but other employees will resent your relationship with her.

Better be prepared . . .

[Rootman]

to accept the fact that you may alianate your entire family. I was involved not in a tech business but in a cleaning business with family. It strained us to the point that I had to quit and things were rough between my sister and I for years.

If all of you are mature abd straight enough character wist it may work. I've seen one or two family business's that have worled, more that have failed.

NO

[lukewarmfusion]

Never work with friends or family. There are, of course, some exceptions.

Will you have the guts to fire your girlfriend if it comes to that? Or will you simply keep paying her? How about your brother? Unless you're able to look your family or friends in the face as a boss/employee relationship, DON'T.

Think of all the bosses you've had. Remember the really bad ones? Do you want that position?

Just make owner/employer status VERY clear

[pla]

Basically, you just need to keep clear documentation indicating who owns the business and who works for it.

Additionally, you may want to file for LLC status, so if you and your girlfriend part ways on less than friendly terms, she can't take the business away from you.

If you just barely manage to stay afloat, this doesn't really matter. But if you start making good money (and to support three people, you presumeably can't do all that bad), CYA.


Of course, this only covers the business aspects of the arrangement. If things do go sour, you may end up estranged from family and your GF leaving for completely financial reasons. But you can't really do much to avoid that, short of listening to your father (Gack! Did I just say that? Damn, getting old, I guess...)


PS, IANAL, which for any discussion like this, we could all save time by just sticking that in our sigs. ;-)

Interesting concept

[Timesprout]

As I have just hired on my girlfriend to help out

I'm thinking of hiring my gf so I can fire her and outsource her responsibilities to 10 women in India.

Consult a lawyer if there could be $$ at stake

[siliconbunny]

I've worked with family in a small programming enterprise on the side. It all worked well because we have a good work ethic (ie no disputes over not pulling weight), and because we respected each other's expertise: I did the coding and documentation, and no-one messed with it. But I didn't do anything with the marketing or management unless I was asked to help. Otherwise, clash of territory can == clash of egos == friction == personal fallings out.

Your enterprise currently sounds like this, and if it's just employment/contracting your relatives, and not equity in the business, there's probably less at stake. Be fair, be impersonal (ie no "you're fired because you beat up on me in the 8th grade") and treat them like you would any other worker. If it comes to a close call, be prepared to have to work out whether the business or the person is more important to you, and sacrifice the other.

However, if there's any question that equity is or might be involved, then anything more than a trivial enterprise needs to be set up right from the start. Otherwise, there is a very good chance of a falling out, and if there aren't procedures in place to handle it, it can get very messy -- not just acrimonious, but litigious to a point where the business itself cannot operate and falls apart, and everyone scrabbles over the still-twitching corpse. Especially if someone senses $$$$ in it for them...

I'm a lawyer now, and it may sound self-serving, but if there's any chance your relatives might work for any serious amount of time, or this business might make a serious amount of money, get a lawyer to settle the basics, in a binding form. Now, *before* there may be big money at stake, and before any disagreements have arisen. Put in place a process to deal with disputes (eg one of you wants to expand, the other wants to consolidate). Put in place a mechanism to handle what happens if one person wants out, or if you all want to go your separate ways. Do they just get cash, or do they get to take a chunk of your assets out too?

If it's just employment, you may feel that even asking for an employment (or consulting/freelancing) contract might be considered offensive. But you may want to check with a lawyer about ownership of IP created by your brother or girlfriend, though, if that's relevant...

and after that

[StevenHallman76]

thinking slightly more long term.. let's say your business goes really well and you decide to hire someone else, someone not in the family. It puts that new person in a very akward position because they have to deal with typical office stress with the added dynamic that everyone else in the company is in the boss' family. not cool.

Not quite true

[A nonymous Coward]

It probably varies by state, but community property only applies to the increase in value. If the company is woth $100K when you marry, and $120K when you divorce, community property only splits the $20K increase.

My own divorce showed up this and one other oddity. She provided the down payment on the house, I provided the monthly payments, yet her down payment counted as a gift to community property because it was BEFORE the marriage, and would have counted as her own money if we had bought the house AFTER marriage. Two lawyers told me the same thing.

Community property is not at all intuitive.

My family business experiences

[soren42]

Of course, just like anyone else on here, I can only share my experiences with the family business, and my insights and recommendations.

My grandfather founded an industrial diamond business in the mid-1960's, just him and his brother. (Industrial diamonds are just a very specialized industrial abrasive, used for polishing, grinding, lapping, and other abrasive uses. It's mostly a chemical, mechanical, and industrial engineering-based firm) It was started with just two employees in NYC, and when it was sold to DuPont in 1994 (and eventually to GE's SuperAbrasives division) it had just under hundred employees based in South Florida. As the company grew, the key employees were family members. Just like in your situation, my grandfather's wife was one of the first employees - doing bookkeeping and billing - followed much later by his children, my father and aunt. My mother was actually an employee at the business when she met (and eventually married) my father. By the time the business had grown to ~60 employees, every divison was headed by a family, and several more worked at the lower levels (including my cousin and I, who worked doing data entry and network administration during high school).

There were a ton of pitfalls associated with having family members work with and for you, and my family learned as we went. Sometimes work problems strained family relations, even to point where my Aunt was fired just to keep peace in the family. Now, ten years after the original family business was sold, my father has started a new family diamond abrasives business, and learned from the lessons of the previous company. His current wife (my mother passed away in 1998), my brother, and I all work at the family business. (I manage the IT department remotely right now, but plan to move back to South Florida in the next several years, as the business grows.)

Here are the key things that I observed my family learned over the years:

• Keep work and home life separate - My father and mother had a very interesting relationship. At work, my father was the VP/Director of Operations for the company, and my mother was the Office Manager. She worked for him. At home, as in most marriages, she was the boss. But, there were very clear boundaries between home and work life, and respecting these divisions kept everyone happier and sane. There was no talk or little talk of work at the dinner table, and there was no talk of family life or family problems in the boardroom.
• Have a set of published rules that apply to everyone - One of the key things that kept our family busniess together was a set of corporate standards that applied to everyone, famly or not. These standards dealt with dress code, vacation time, sick time, tardiness, and other standard HR policies.
• Show favoritism - As a corollary to the last rule, it's important to have an even set of rules, but occasionally, it's important to break them in private for family members. Family members want to know that they have a little bit of edge because they're on the inside track - and that's okay. It keeps them happy, and prevents Thanksgiving dinner from turning into a corporate affair. It's important, however, that this doesn't become a habit, and that your other employees don't get wind of it - it should be a quiet, special exception.
• Honesty is of utmost importance - While as a manager, I espouse being honest and forthright with all of your staff members, this is even more important with family. Be up front and open with your relatives. The last thing you want to have happen is for issues to circulate through the "back channels", and have it impact your relationship outside the office.
• Don't involve other family members - Don't share your business life, gripes, problems, or issues with family members that aren't a part of the business. This applies to siblings, parents, children, or anyone else. Don't gossip about the poor performan