Working with a family member can generate its own challenges when it comes to dispute resolution, succession planning and effectively separating work and private life.

One Melbourne brother and sister duo know that only too well. Former lawyer Abigail Forsyth and her brother Jamie Forsyth have worked together since 1998 when they launched Bluebag, a small chain of coffee shops inMelbourne. In 2009, they embarked on their next entrepreneurial adventure, the reusable KeepCup range designed for the takeaway coffee market, replacing disposable cups.

In just two years, more than 900,000 KeepCup cups have been sold throughout Australia, New Zealand, South Africa, the US, UK, Europe and Asia. It’s estimated that KeepCup has diverted at least 100 million disposable cups from landfill.

Other family members have contributed to KeepCup’s success. Brother Stuart Forsyth has been managing the KeepCup London office since November 2009 and their father, while officially retired, is “a mentor and peacemaker between us, and a wise sounding board for the KeepCup team”, Abigail explains.

What then, are the specific qualities required to make a go of it with family members? “To make your business relationship work requires determination, trust, extremely open communication and the ability to make one another laugh … eventually,” says Abigail. “Forgiveness, too.”

Naturally, there are pros and cons with the arrangement. “Advantages are that you work with someone you love, completely trust and have known your whole life,” says Abigail. “Disadvantages mirror the advantages in that those things can preclude you from role delineation engaged in as a matter of course in a normal partnership or employment relationship.”

“Jamie and I started working together while single and in our twenties, and we now have growing families. The move to KeepCup – which has more social working hours and a smaller employment base than the Bluebag business – has been a welcome transition.”

Do they show favouritism to each other at work? “Jamie and I have a 50/50 partnership, so the short answer is we DO favour each other,” replies Abigail. “Yet, sometimes, that closeness, that favouritism, can be clouded by a difference of opinion. A few days of keeping out of each other’s way works just fine, as does having a soundproof room”, she notes.

To effectively separate private and working life is something the pair has learned. “We’ve certainly become better at that over the years and particularly as we’ve had our own children,” says Abigail. “Nieces and nephews help you keep things in perspective and your time at work is certainly more limited and focused.”

Family succession strategies

Due to emotional ties, many family-run businesses fall into the trap of not discussing leadership continuity, to their detriment. More than 65 percent of family businesses go under in the second generation, and another 20 percent fail when the business passes to the third generation, according to Family Business Australia.

Sign off on a succession plan, clarifying who will replace family members if they leave the business. How will revenue, market share, skilled staff levels and brand reputation be impacted? Carve out a step-by-step plan of continuity for your business’s operations, policies and culture.

Plan ahead about whether you’ll keep family ownership and management control, keep family ownership but hire external management, sell the business to external people or a staff member, or close your doors.

Software use for job delineation

Software can help as a job arbitrator for family members – and for all staff, for that matter – in terms of fairly allocating training, salaries and incentive programs. Putting hours worked and KPIs attained on spreadsheets can help take the emotion out of how money is distributed in your business. As Abigail notes, “KeepCup recently implemented project planning software that gives us transparency, accountability and a better ability to prioritise and collaborate,” she says. “This holds true not only for Jamie and myself, but for everyone. I’m really keen to see how it changes the working environment.”

Abigail Forsyth’s top four tips for working effectively with family members.

If you’re going into business with family, choose a family member who:

• is fair and decent,
• brings a different skill set to the business table,
• is committed to the long-term success of the business/venture in equal measure to you, and
• can agree with you about business legalities – for example, job responsibilities, sick leave and other entitlements, exit and succession policies.

For more information and support, Family Business Australia organises family business director courses, networking opportunities and advice forums in Melbourne, Sydney, Adelaide, Brisbane and Perth.

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