Should you work with family?

13 April 2015

Britain has a strong history of successful family businesses. Among them are firms that have survived centuries, innovative start-ups and some of the nation's most famous brands. But how have they become so successful? We spoke to owners of four family businesses to find out how they make it work.

Seven Bro7hers, Microbrewery

Keith Worsley understands the levels of diplomacy needed to run a family business – he runs a craft beer brewery with his six brothers. "One of the first things we all agreed on was we would run the business as a democracy. As there's seven of us that means we will always have a majority and be able to make decisions quite quickly," says Worsley.

"There are interesting dynamics between us all as our ages vary from 52 to 32, and even though there is the ever-present sibling respect, there is no seniority within Seven Bro7hers. It took a while to get used to but we're comfortable with it now. We do have the odd cross word but we're all close enough to shrug it off and iron out any issues that arise."

Worsley adds any downsides of working with family are far outweighed by the positives. "Pretty much most of the time we all get on. We have similar interests, most of us have young families, and we all live close to each other so to be able to work together towards a common goal in an industry we love is brilliant."

Aside from the family element of his firm, Worsley has also learnt a lot about business financing since setting up Seven Bro7hers. They used the government-backed Start- Up Loans to borrow the capital they needed rather than a high street bank. Thinking beyond the traditional lenders really paid off.

"We were looking for the most favourable terms," says Worsley. "Start-Up Loans was perfect as it offered interest- only for the first year, which was crucial for us. Any start- up will struggle with cash flow at first, so any area we can see that will free cash up is explored."

Worsley's final piece of advice is to talk. "The best advice I can give any family looking to start a business is to talk to each other constantly. Open communication is essential. We discuss everything on a daily basis using social media. We have a group discussion forum where we all keep each other up to date on every aspect of the business. Enjoy yourselves. Agree to differ at times but be ready to see everyone's point of view."

Stoke By Nayland, hotel and farm

Tamara Unwin is part of a family that have run a successful farm and hotel business in Norfolk for almost a century. It started with her mother, Devora, and her first husband, Bernard, running a large fruit farm in the 1930s that developed into the international juice brand Copella. Now they also have a hotel and leisure complex.

The family's success is partly due to their innovative solutions to problems that could have sunk other businesses. The juice company came into existence when new European laws meant they couldn't sell their misshapen apples to be eaten anymore, so they began juicing them instead. They sold Copella to Tropicana in 1998 and have used the money to expand their hotel business - Stoke By Nayland. They also continue to run one of Europe's largest orchards. Unwin runs the company alongside several siblings and her nephew.

Running a successful family business for almost a century has taught the whole family a lot. Unwin's advice to anyone else thinking of setting up a business with relatives is to be clear about what you are aiming for, and be firm about who you recruit.

"They need to do their research to ensure that there is a good market for their product or service before they even begin," she says. "Then create a clear business plan and ensure there is secure funding in place."

When it comes to recruitment, don't be blinded by familial love. "Recruit on a meritocracy basis, not just because they are a member of the family. Then each family employee should be given clear roles and responsibilities."

If your business is a success, you will also need to think about succession. "Put in place a family constitution, which sets out clearly the rules and succession plans of the business," says Unwin. "We used a family business consultant for this and it would have been helpful to have done it earlier."

Unwin's final piece of advice for someone running a large family business is to bring an outsider on to the board. "We've done this for a number of years to help keep things professional and focused, as it is often easy for family meetings to go off on tangents."

Muddy Matches, dating website

Sisters Lucy and Emma Reeves set up dating website Muddy Matches in 2006. They believed they had seen a gap in the market for a niche dating website aimed at the countryside community but their friends and family warned them it was a terrible mistake.

"If you are confident something is a good idea, don't let other people convince you otherwise," say the sisters. Nine years later, the website has more than 100,000 registered members and was named the Best Specialist Dating Website in the country last year.

Running a business with your sister can be tricky but Lucy and Emma have found keeping the lines of communication open has helped them avoid arguments and maintain a productive relationship.

"It's important to make decisions about the company together, so that you each know what is going on. It may sound like common sense but don't just go ahead and do something behind their back as it will cause problems," says Emma."It's almost impossible to agree on everything, but it's not worth falling out over it. Try to find a compromise that works for both of you."

Finally, remember that your business partner is also your relative and, hopefully, friend. "Spend time away from the business together so that you can relax. And try not to talk shop when you are away from the office."

Ascot Mortgages, mortgage broker

If you are thinking of setting up a family company, then make use of the business experience and skills you already have. This is how Dave Gibson came to found mortgage broker Ascot Mortgages with his wife Alison and son Kevin.

"Kevin and Alison both worked in the mortgage industry before we set up Ascot, whereas I had more general business experience," says Dave Gibson. "We were fortunate the roles we would play in our new business seemed clear to us from the start. I think family businesses struggle when members of the family are allocated roles because those roles need filling, rather than because it's where their skill set lies."

Gibson also believes in leaving the traditional family hierarchy at home. "We share skills with each other and develop together. Although I'm the head of our family, so to speak, I've learnt a lot from my son. I see us all as equals in the workplace and that is important."

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