Barista Magazine

OCT-NOV 2017

Serving People Serving Coffee Since 2005

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set up," says George, "except you have to come to agreements on everything with at least one family member." When Klatch Coffee incorpo- rated in 2007, Mike and Cindy gave Heather and Holly stock. "Both of them are owners. Between my wife and daughters, they could vote me out," he laughs. He says the legal doc- umentation is "typical in terms of positions within the company and what they get. Before 2007, we weren't making any money; we were trying to pay the bills. It wasn't until we started wholesaling that we started to be profi table, and it made sense to incorporate." It's important to keep lines of communication open and hold family members to the same standard you would any other team member. While you wouldn't expect less from them, try not to overestimate their capabilities without talking to them fi rst and setting expectations for standards that everyone is pleased with. "I've learned the hard way that lack of communication can cause friction within the family," says George. Now, at least twice a month he and Kristina meet to talk about the business. "Some of it's just informational, some of it is strategy. But having that open line is an absolute must. It eliminates so many potential issues down the road," he says. "We all get along—sometimes they think I'm old and don't know what I'm doing, and I think they're young and don't want to listen— but it's all worked out as we each play to our strengths," says Mike at Klatch. "I mean, it helps that it's coffee and that we all love it, but none of us are afraid to speak our minds, and I think we keep things pretty well in perspective." Trade-offs Sometimes with a family business, it can feel like there's never any break from work. After all, you see each other at home, or on vacation, or at holiday gatherings, and it can feel impossible not to talk about work in your off hours. Of course, it can feel that way anyway for entrepreneurs, but instead of your family being your refuge, they are in the trenches with you. All the time. "It's not like your best friend necessarily wants to see you on the weekend when they see you every day," says Helen. "But it's like you're siblings at that point. And I'll emphasize again that everything has worked out in terms of individual contributions, trust, and being able to each do our own things to keep the business strong." The "outsiders" Non–family members within the business may fi nd it diffi cult to join a closed loop of family decision makers. Fresh ideas from outsiders may need to be encouraged—and rewarded—for getting the family out of its box and reminding the team that anyone can contribute and be rewarded for it. Another way to bring non-family into the fold is with transparency. "We're extremely transparent at Equator," says Helen. "We've creat- ed something quite special. We're profi table and have wonderful peo- ple working here in a competitive space, realizing their own dreams." Helen now has a vice president of sales, and Brooke has seven people on her product team including a director of coffee whom she's men- tored and empowered. Maureen is COO and has a team, as well. Mike at Klatch Coffee says being a family business has not been a detriment to other employees. "People want to work for us because of our success and awards, to learn from us and with us," he says. They also prefer to promote from within and "employees notice that." There is a bonus system in place based on sales, and educational opportuni- ties like entering barista and brewing competitions. (Todd Goldswor- thy has won two United States Brewers Cup Championships, and Jes- sica Rodriguez has fi nished in fourth place in the same competition.) The last thing any business owner wants is to turn off talented employees who would otherwise be motivated to move up within the organization. Further, you don't want unqualifi ed or ill-equipped family members to become leaders, to the detriment of business performance. Keeping non–family members included, engaged, and challenged can eliminate the rise of an "inner circle versus outer circle" dynamic. Set expectations and weigh the pros and cons Though it can work out to great success, our advice is to be extremely careful about doing business with your family and friends. Money changes things—and the more money is involved, the more change you might see. Be sure to set expectations early, and often, and com- mit to keeping business and personal issues separate so you can be productive during the work day. Clearly, family-owned and managed businesses can carry specif- ic risks and benefi ts. Don't consider a family-owned enterprise an automatic win-win, but understand that the potential for benefi ts and a happy, honest work environment can be great. ILLUSTRATION BY JACK POLLOCK 99

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