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Family Business: The Good, the Bad and the Ugly of Brotherly Love
1 Jul, 2008 By: Lloyd Merritt Smigel Pest Management ProfessionalSeveral years ago, I worked for two brothers that ran a pest management company which was started by their father. Unfortunately, it was turned over to the older brother to run — and the younger brother was treated like dirt. The older brother had a huge office and the younger brother had a hole in the back of the place.
The older brother made the big money and the younger brother made the little money. It was a terrible situation. Thankfully, the younger brother finally quit and now has a decent life.
Contrast this to another company where the younger brother told the older brother he wanted to come into the company as a career. The younger brother didn't expect the older brother to start him out with equal salary, stocks, etc., but that's what happened. When I asked the older brother why he started his brother out with so much, he simply replied "He's my brother. I love him."
 Lloyd Merritt Smigel |
At yet another company, the situation was a bit more bizarre. The two brothers didn't speak to each other and the father suggested I not meet with the two of them at one time. Of course, I wanted to confront the situation and asked him to set that meeting up right away.
The older brother couldn't wait to jump all over the younger brother for any reason whatsoever. I arranged the meeting at a restaurant — a public arena — to help avoid a blow-up. I was wrong. The older brother went ballistic anyway.
The younger brother, obviously familiar with this situation, exited with "I'm going outside for a smoke." He left me with the screaming older brother. Eventually, Dad sold the company because there was no way to salvage this situation.
So there it is: the Good, the Bad and the Ugly. It's the way things are. In most cases the siblings work it out. In some cases, it just can't be done and, like fighting siblings, you have to separate them. One father had three sons and set each of them up in separate cities with separate companies. That seemed to have worked out.
The point is every family situation will be different because the players are all different. The sooner you establish the rules and game plan for the family business, the easier it is to adjust. Once the titles have been issued, it's difficult to get into line.
DON'T MAKE ME COME UP THERE
After the decision is made to let the kids run the business, the parents usually step away until they have to come in. It gets down and dirty, and Mom and Dad get caught in the middle. It's not fair, but that's the way it is.
In some cases, the disagreements are put on hold because each sibling has equal voting rights. This can easily make a company become stagnant. In other cases, Dad, who only wants to retire, has the breaking vote and no matter which way he votes, he will be playing favorites in the mind of the person he voted against. It's a tough position.
This should all have been thought out much earlier. What happens if one of the brothers gets on drugs? Marries one of Donald Trump's kids and wants out? This should all be considered beforehand.
I refer to these things as the "what ifs" in business. You really have to look at all options, especially if you're a family-owned company.
Most of the companies I've worked with have been able to work things out. While there are times when the siblings must understand they either get with the program or get out, the important thing to remember is the company must survive — or be sold.
Prepare for the future early on, and avoid the sibling rivalry.
Smigel, president of Care Management Consultants in Oceanside, Calif. You can reach him at 888-711-3232 or by e-mailing
becky@lloyd-smigel.com.
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