Although family businesses are difficult to build, such companies are more resilient in times of crisis because they focus on long-term growth and generally pursue their policies more conservatively.
It appears that family business is a cornerstone of a family’s prosperity. Over the centuries, tradespeople and moneylenders have tried to establish a business that would later be passed on to the next generations. Every father around the world wants to be the founder of the company in which his children will later work. Obviously, this is a savvy investment into the family’s future, but not that easy to do. This might be due to the difficulty in running such a business that the family business is not the most popular type of startup.
We incorporated Sumsub with two of my brothers, Peter Sever and Andrew Sever, in 2015, when a lot of online fraud was going unnoticed. That’s when we realized we wanted to create a company that would fight online fraud & money laundering.
Now, after almost 6 years, I can say that the idea to create a startup with my brothers was a challenge. On the one hand, family is something that will stay with you forever, and the limit of trust in your family members is never out of stock. On the other hand, family ties are odds, including those related to childhood and resentments of the past.
All along the way, we made many mistakes, but we did it together. Thanks to mistakes, we realized what our advantage was. With such experience, we developed the rules by which we keep developing our company.
Agree on the rules from the very beginning
Before starting a family business, all conflicts between partners must be resolved. If in normal life the relationship does not get along, then you should not work together. First you need to deal with personal issues, then think about doing business together.
Trust your partner’s intuition
Having shared responsibilities, trust your partner. This is a rule we unconditionally follow, and it helps avoid conflict. Of course, we all discuss strategic issues together, but the final say belongs to the one who is responsible for a particular area.
Delineate responsibility
You need to clearly define responsibilities. In a situation, when there is a force majeure and a problem in the company, you need to know with certainty, who at the moment is solving this problem. Functions are divided not by seniority or gender, but by who is better at certain operations. It all comes down to specialization and talent. For example, I always liked to create and improve products, while my brothers are good at strategic development of the company and operations. Don’t forget to discuss monetary issues right away and state right away who gets paid for a particular service and how the profits are distributed. Such issues may be awkward to discuss, but it definitely has to be done.
Develop a common approach in the discussion
My brothers and I choose to have straightforward discussions before 6 AM. Everyone can speak up and everyone will be heard. However, this rule will not work in all families; in yours, choose an approach that works for everyone. Discussions and arguments in business are important, the main thing is to stick to the established order.
Don’t underestimate the option to work with coaches and psychologists
In no other business will you encounter resentments that stretch back to childhood. However, you may not be aware that some character trait of yours irritates your brother or sister. Psychologists can help you understand what causes the same problems over and over again and solve them.
Separate personal life and business, even if you spend all your time together
Despite the fact that we spend 90% of our time together, and we believe that spending time together helps to share emotional experience, so that it would be not just business that we have in common. But on vacation, we never discuss business, even if sometimes it happens uncontrollably. We share personal time and work moments, and that helps each of us.
Family relationships bring something very important to the business for the whole company, namely the basis of ideology and the basis of corporate culture and the fundamental principles of family. Our investments, our purchases, our attitudes towards each other are softer and friendlier, and in difficult times, this model proves to be more viable.