Barista Magazine

OCT-NOV 2017

Serving People Serving Coffee Since 2005

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Should You Mix Business with Family? By Tracy Allen YOU MAY HAVE THE SAME LAST NAME or even the same home. Deciding whether or not to start a business with family mem- bers, however, is rarely as clear as your bond with them. You may feel you can trust them in any situation, and you know what puts them at ease or what triggers a freakout. You understand their communication style and aren't likely to be caught off guard by character fl aws that could spell disaster for the partnership. But is it smart to run a business with these people? "There was some naiveté there, for sure," says Helen Russell, who founded Equator Coffees & Teas in 1995 with life partner Brooke McDonnell. "When you work really hard at something, to be able to be together doing it can be wonderful. But it was tough at the beginning with fi nances and career trajectories on the line—we were taking a big chance." Yet here they are, 22 years later, going strong and continuing to grow the business. Klatch Coffee in Rancho Cucamonga, Calif., was founded by Mike and Cindy Perry in 1993 with a similar level of blind trust. "My wife ran the café during the day while I was at school, and I ran it at night while she was with our daughters," says Mike. Their oldest, Heather, was 11 at the time, and became a barista by the time she was 14. "She was naturally drawn to it, and later when she won the [United States Barista Championship], it helped us a lot," Mike continues. "It took longer for Holly, our youngest, to come around to coffee. But she loves the retail aspect of business and hospitality, and we never forced it on her. So by the time she was ready to come into the business, she had her own skillset to contribute." When deciding whether to go into business with your spouse, parent, sibling, cousin, or what have you, consider that you will have to run every major decision past your partner(s) for approval, determine who owns how much of the business, factor in each person's role, evaluate one another on a regular basis (whether silently or verbally), and deal with risk and failure as one entity. If you're hiring a family member who won't be a full partner, can you handle the dynamic of being their boss? If you're not scared off yet, read on for advice from decades-long family partnerships, if you really want to call your spouse, child, or sibling "partner" or "employee." Learn to navigate dynamics and disagreements From time to time, you and your partner will undoubtedly have different ideas about what needs to get done, and how—and those disagreements can sometimes come home with you. "There are times when you might think, 'I can't believe you bought that coffee at $5 green,' or, 'How come you didn't sell that account,' or, 'Why are you only invoicing once a month,'" says Helen. In fact, the lack of familiarity in questioning one another was one reason she and Brooke brought in Maureen McHugh as their third partner not long after they got off the ground. "Maureen would just send us to our corners when we'd get in arguments about vision or what we were doing. She kept us on track," Helen says. "Having Mau- reen as part of the company is a big reason Brooke and I have been successful as life partners and business partners." George Vukasin Jr. and his sister Kristina Brouhard bought the family business, Peerless Coffee in Oakland, Calif., from their parents six years ago. "We wanted to earn it; the fact that we had the oppor- tunity to buy the business was gift enough," says George. "And my parents deserve all the credit. They made us work for it, they were fair, and they gave us the tools to succeed on our own." There was still the fact that George and Kristina needed to develop their own practice for settling any disagreements. "When my parents owned the business, my father's decisions were fi nal—a simple but effective system," George says. Now, two people have equal say. Their solution: an advisory board that guides the company and the partners through any impasses. "Once the company changed hands, Kristina and I needed an external structure to clearly delineate how to proceed in case of disagreements," George adds. Defined roles will keep you out of each other's hair All of the people interviewed for this story emphasized the need for distinct roles when running a family business. At Klatch, Mike runs wholesale and the general business; Heather oversees retail consult- ing and training; and Holly is the retail general manager. "It helps that we're working in coffee—it's just enjoyable—but we don't see each other every day; we're out covering our own bases," Mike says, adding, "Also, my daughters are better at this than me. They just amaze me with their wise decisions." At Equator, Brooke was always passionate about product, wanting to know the coffee farmers and experiment with roasts; Helen was the people person who could go out and sell to accounts of any size; and Maureen was a natural at operations and process. "We fell in to our strengths," says Helen. "It can be tricky at fi rst, when you're small, until there's enough room for you to fall in to your own lanes." "My sister didn't want to run the company—even though she easily could—and it was something I wanted, so that worked out," says George. He's president and CEO and Kristina is executive vice presi- dent. Each of them oversees several parts of the company and George has overall visibility on the entire operation. "It makes life so much easier—you can only handle so many direct reports," he says. "Having someone else helping to run the business that you absolutely trust is a huge asset." George also stresses that an advisory board must be made up of people who are mentors, possibly semi-retired with time to give back to the local business community. "You need people with knowledge of things like sales, distribution, or retail, and who have the time to know your business and give you sound advice. Legal structure and communication Peerless also has a number of legal documents in place for unexpected situations. "It's probably no different from how other partnerships are 98 barista magazine

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