Two Perspectives: Working With Family

Pablo Pomes @PabloFPomes

Many people believe that working with family can be very difficult. And the truth is that it can be if you don’t set specific parameters right from the beginning. Working with family has been a blessing for us. We get along very well, and we treat each other with a tremendous amount of respect. You need to be upfront on the message that everybody will share the workload evenly. We put down a contract in writing that states our relationship after becoming involved in the business. It helps avoid conflicts that can come up later and can divide families. Get an attorney to write up a contract and include the division of shares, the amount of work that’s going to be put in, the general expectations everyone has, and let everyone review it. If you have more than one family member joining in, then specify the specific areas where people have their different strengths and maximize them while drafting the contract. Everybody will have a say in the final output of everything. You put everything in writing, form an LLC, divide the number of shares, and that that makes for an excellent business venture with family. And if issues come up, you address it head-on, and you move on, refer to the contract, and have a neutral party to referee. Working with family is a blessing; it’s truly a wonderful thing. I’ve been doing it for the last 36 years, and we’ve never had a problem that we could not resolve.

Michael Pomes, @MichaelPomes

Working with family can be rewarding and challenging. People tend to be cautious before they go into working deals with family because of stories they may have heard about things going poorly for others. Whether it’s buying a property together, opening a business with family, or whatever the situation may be. And what tends to get pushed aside are the many stories where it’s worked well. I grew up in a business-oriented family; my siblings and I were introduced to the idea that my parents worked together. I grew up in an environment where I saw mutual respect between my parents. I also noticed that they had similar respect with the other team members and employees, never crossing a certain line. It was essential to see that behavior being modeled because it informed how I would handle my own professional relationships years later.
Now, as a 30-year-old who’s business partner is his father, making sure that things are done properly, legally, and officially is of the utmost importance. People have shared their stories of doing business with a family member, and because they don’t want to offend the family member and imply they aren’t trustworthy, they avoid putting legal contracts together. I think that shouldn’t be the case at all. Arrangements are essential because you’re doing it to protect one another; you’re doing it if something were to happen. You’re then able to fall back on some legal paperwork and refer to that. If you’re going to go into business with your family, make sure things are done properly and legally. Put a contract together, open a corporation, make sure the shares of the corporation are shared fairly, get it all done legally. I’d advise anyone to seek out third-party legal advice, and it may cost you money upfront. Still, it’s going to potentially save you from a long, impossibly bad outcome if something goes south.
The last thing I would add is that just because there’s a family member in the business, they shouldn’t receive special treatment. There are stories of people who work with family members who slack off and feel like they can’t fire them. Not the case for me, it’s black and white. Even though we’re family, in the business, we are associates. There should not be any special treatment.
Ultimately, I would say that working with family can be done, it’s a beautiful and rewarding thing, especially when done properly. Amazing families have built massive businesses in Southern California. We have the Portos family, “In-n-Out,” which started here in Baldwin Park; there are great examples of family businesses succeeding. You can absolutely grow a big company with family. The key to starting a family business is being smart and having those contracts drawn up, have mutual respect, and for the business.