Starting a business with siblings.

Discussion in 'General Business Forum' started by xCarlx, Jul 6, 2019.

  1. xCarlx

    xCarlx UKBF Newcomer Free Member

    11 1
    Hi guys, wanted to ask a very important question to see what you all think.

    I'm sure many of you have had the same thoughts about going into business with friends and family.

    I'll be going into business with siblings (Property development) but we all seem to have very different ideas of what we want to achieve or what is a gool or bad deal. I just know we will have disagreements further down the line. Plus the fact that we are siblings means we can have a disgrements or falling out at any time (as you do).

    So with that, the thought of starting a business together worries me bit with regards to the future.

    It may sound like we're at war at all times, we're not lol. But the 3 of us are quite strong willed and capable of rilling each other up.

    But we can also be a massive success, so this is an opportunity that we can't miss.

    Do you guys and gals have any ideas for how I should go about handling this?? I want to go into business with them (mom wants us to do it together, you know how it is) but I want to avoid as much POTENTIAL (that may never happen) issues in the future.

    I was thinking of suggesting we start our individual businesses and then joint venture business with the 3 of us together.

    Should a future project arise where thoughts and ideas are not in line with the others then we can do it ourselves through our own business and when we are all in agreement, we can do a joint venture together.

    Just an idea!
     
    Posted: Jul 6, 2019 By: xCarlx Member since: Jul 6, 2019
    #1
  2. Mark T Jones

    Mark T Jones UKBF Big Shot Full Member

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    if you start a business together, get a very robust partner/shareholder agreement. Similarly with any joint ventures the closer you are emotionally, the more important this is.

    That said, there are plenty of examples of extremely successful family businesses. Not being scared to disagree can be a positive
     
    Posted: Jul 6, 2019 By: Mark T Jones Member since: Nov 4, 2015
    #2
  3. xCarlx

    xCarlx UKBF Newcomer Free Member

    11 1
    Hi Mark, thank you for the suggestion, I will be looking in that! Yes, it makes sense, closer you are, the harder it can become, especially when everyone knows each others buttons to push :p

    No doubt this could be a success though, if they were not very capable, I wouldnt waste my time going into business with them, and the same with them and me. Fortunately its a situation where everyone has something to offer.
     
    Posted: Jul 6, 2019 By: xCarlx Member since: Jul 6, 2019
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

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    Congratulations, you are one of the sadly rare posters thinking about problems with business involvement before they happen.

    The forums are littered with people who didn't.

    Get agreement about what happens when things go wrong now, while you are still talking, rather than later when you refuse to talk to each other.

    Nothing wrong with strong willed people going into business. So long as it doesn't cripple the business.

    Doing a limited company with each of you shareholders? And one (or all) of you being directors?
     
    Posted: Jul 6, 2019 By: Mr D Member since: Feb 12, 2017
    #4
  5. The Byre

    The Byre UKBF Ace Free Member

    8,638 3,355
    Rule One in business - never enter partnerships - and with relatives last of all. And brothers and sisters are the worst of the lot!

    No, it is not! It is an opportunity that one day you will wish you had passed on!

    Oh trust me, they will happen and when they do, they'll be real doozies!

    Well, at least one of you is thinking along the right lines! But the chances are that you will never get all three to agree on a single project and how to develop it - so leave it that way!

    Sorry to have to be a wet blanket, but nearly all businesses fail in the first five years and the three main reasons are (1) lack of sufficient funds (2) lack of preparation and market segment knowledge (3) partnerships falling apart.
     
    Posted: Jul 6, 2019 By: The Byre Member since: Aug 13, 2013
    #5
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  6. xCarlx

    xCarlx UKBF Newcomer Free Member

    11 1
    Thats a fair idea, and makes sense. I think we will need a VERY robust Shareholder agreement. I would go for all 3 of us being directors.



    Hey you sound just like the voice im my head!! haha.

    I may regret it further down the line but I think with an agreement that water tight we should avoid most issues. We are all new to the business, we may branch out and do our own things later down the line but we need this to get us going, and if it goes well / stays well then we will keep it going.
     
    Posted: Jul 6, 2019 By: xCarlx Member since: Jul 6, 2019
    #6
  7. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

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    Don’t even think about it!

    It will be a recipe for disaster and will bring arguments between the siblings and perhaps more importantly, the husbands/wives.
     
    Posted: Jul 6, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #7
  8. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

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    Let each sibling do their own thing.
     
    Posted: Jul 6, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #8
  9. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

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    Dont do it
     
    Posted: Jul 7, 2019 By: Chris Ashdown Member since: Dec 7, 2003
    #9
  10. simon field

    simon field UKBF Big Shot Full Member - Verified Business

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    Run, run away as fast as you can!

    If you value your relationship with your siblings that is....
     
    Posted: Jul 7, 2019 By: simon field Member since: Feb 4, 2011
    #10
  11. ethical PR

    ethical PR UKBF Legend Free Member

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    It sound like whatever more experienced business heads say the OP is going to go ahead anyway.

    @xCarlx you are wrong - having a shareholders agreement won't stop you having partnership problems it just means you have a legal basis from which you can argue when things go wrong.
     
    Posted: Jul 7, 2019 By: ethical PR Member since: Apr 19, 2009
    #11
  12. The Byre

    The Byre UKBF Ace Free Member

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    Which is a nice way of saying that you will be forced to clobber your own brothers and sisters with legal penalties and destroy all semblance of family cohesion and unity, as the entire tribe descends into a frenzy of internecine mad-cow desease.
     
    Posted: Jul 7, 2019 By: The Byre Member since: Aug 13, 2013
    #12
  13. Mr D

    Mr D UKBF Legend Free Member

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    That's only if they end up fighting over something. The business or something not business related.

    There are families who have run a business successfully. Not every business started up or run by more than one person fails.
    Heard recently about a business that went under, been in the family for 13 generations. Presumably they managed to run the business long enough to hand off to the next generation without destroying it.
     
    Posted: Jul 7, 2019 By: Mr D Member since: Feb 12, 2017
    #13
  14. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

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    Bet they were started by one man who then took on and trained his son whilst still in charge and so it passed down the line, experience always making the decisions until the son or daughter gained the knowledge

    Here we are talking about three siblings presumably without much experience following their mothers grand plan, my expectation is 80% failure in say 4 years and 20% chance of long term working together
     
    Posted: Jul 7, 2019 By: Chris Ashdown Member since: Dec 7, 2003
    #14
  15. Mr D

    Mr D UKBF Legend Free Member

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    And there are indeed many businesses started by more than one person.

    20% or 80% - those numbers do not have to be relevant to what people can achieve.

    I would say that more than one person in the business decision making does complicate matters. Does not have to kill the business nor have family disagreements impact the business running.
     
    Posted: Jul 7, 2019 By: Mr D Member since: Feb 12, 2017
    #15
  16. The Byre

    The Byre UKBF Ace Free Member

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    There once was a woman who ran a small grocery store and she had two sons called Karl and Theodor and she decided to call it a day and hand over to her two sons. She had opened the store in 1913 and by 1946, she had struggled through two wars and wanted to retire.

    They were ambitious young men and by 1950 they had 13 stores in the area - but wouldn't you know it, they fell out. And they did this repeatedly over some of the silliest things. Karl wanted everyday stuff like sugar, flour and salt on the right side of all 13 shops, Theodor wanted all that sort of thing on the left.

    Karl wanted more fresh food, Theodor wanted to stay with cheap tins and packaged goods. But when it came to cigarettes, the feathers flew! Karl was anti-smoking and thought that cigarettes at the check-out would encourage 'the wrong sort of customer'. Theodor smoked!

    They split the town into North and South - Theodor got the Northern stores (plus the original store) and Karl got the Southern stores. Things had become extremely 'frosty' so it was either that or crash and burn!

    Today Aldi has some 12,000 shops in 19 countries and has launched this year in China. Each country is assigned to either Aldi South (orange and blue logo - Karl Albrecht) or Aldi North (blue - Theodor).

    Just because you happen to be related to someone does not mean that you are going to be able to work with them in a business environment!
     
    Posted: Jul 7, 2019 By: The Byre Member since: Aug 13, 2013
    #16
  17. Clinton

    Clinton UKBF Big Shot Full Member

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    If you meant starting a business with siblings as partners then, no, bad idea. If you meant starting a business with siblings as stock ...that's a different matter. Stock up, start selling!
     
    Posted: Jul 7, 2019 By: Clinton Member since: Jan 17, 2010
    #17
  18. AllUpHere

    AllUpHere UKBF Ace Free Member

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    I think it can work, but you need to have 1 boss. Don't split it with equal shares for everybody, someone needs to be the boss. This, however, only works if one is the natural boss, and has attributes to support them having the final say.
     
    Posted: Jul 7, 2019 By: AllUpHere Member since: Jun 30, 2014
    #18
  19. xCarlx

    xCarlx UKBF Newcomer Free Member

    11 1
    Thanks everyone,

    Really hard decision, but i totally agree with a lot of what has been said, for and against.

    I'm still in two minds, I can upset someone now, or upset them later basically. I've had discussions the last couple days that have at times been annoying and i get the feeling that there is 'good behaviour' taking place as we are all needed to pool money to get started, keep everyone sweet basically. I reckon once up and running, that would change a bit.

    For what its worth to those who say "he wont listen anyway", my gut is saying NO, and so i will have to bow out of the partnership because i Just know how it will end. We have words and moments at times but we're cool again a few days later but when business is involved... i just dont need the hassle.

    As for 1 Boss... that wouldnt happen. Me and my brother... He claimed i was very risk averse yesterday, I said im not, he responded i was, so i ended that convo before i started to get rilled up. I am very calculated (I work in accountancy, a coincidence maybe), my brother is all in 100% super risky bull in a China shop (But talented). Can you imagine the butting of heads that would take place when we decide new projects, its happened already to be honest. So there wouldnt be one boss and certainly not one person earning more than the others.

    Oh my oh my, im going to end up upsetting someone........... :-(

    Time for bed, work tomorrow
     
    Posted: Jul 8, 2019 By: xCarlx Member since: Jul 6, 2019
    #19
  20. xCarlx

    xCarlx UKBF Newcomer Free Member

    11 1
    Oh just to add,

    Im going to suggest that we start our own businesses and further down the line we can Joint Venture if it suits us and we all agree on it. But as we have our own things goign on, there shouldnt be any stepping on toes.
     
    Posted: Jul 8, 2019 By: xCarlx Member since: Jul 6, 2019
    #20