It isn’t unusual for siblings or relatives in Pennsylvania to be in business together. While these partnerships can be profitable and enduring, conflicts can and do happen. Unlike partnerships between unrelated individuals, family business disputes can wreak emotional and financial havoc within immediate and extended families. There are, however, several things that you can do to avoid or mitigate conflicts within family businesses.
Have reasonable expectations
Many people join or start a family business expecting that they can trust their partners and that business transactions will run smoothly. This is often based on ideas about family loyalty and the fact that the partners have known each other for most of their lives.
However, it’s important to remember that interfamily disputes are common both within and outside of business. Personality conflicts, established family roles (such as “big brother” or “little sister”) and long-standing grudges can emerge within a family business.
Use the same standards in going into business with a family member as you would going into business with a casual friend or stranger. What do you know of this person’s personality? What about his or her character and work ethic?
Structure your business carefully
When organizing your business, make sure that you have addressed the same issues you would with any other business partner. These issues include financial responsibilities, compensation, business roles and work duties. These issues should be carefully negotiated and documented in writing so that everybody understands what is expected of them. Not doing this can create resentments and confusion that can permanently damage a family relationship and lead to business litigation and disputes.
Seek mediation services
If your business relationship with a family member begins to deteriorate, it is often wise to seek help from a competent third party. An attorney or professional mediator with experience in business litigation and disputes can provide a much-needed perspective that can help get your business back on track.