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When Disagreements Arise in the Family Business

| Jun 27, 2018 | Business Planning |

Whether as kids fighting over who gets the next turn on the swing or as adults arguing over politics during Thanksgiving dinner, you and your siblings have had your share of disagreements over the years. The occasional quarrel among relatives is usually resolved without too much drama, but when it comes to Colorado families that own businesses together, a fight can turn disastrous.

A small disagreement between you and your siblings has the potential to affect your relatives, employees, customers and company success if the fight goes unresolved. Let’s say, for example, that your brother accuses you of taking money from petty cash for personal expenses. You insist that if you ever borrowed money from the company, it was in small amounts and you always repaid it promptly, but your brother does not believe you. The fight escalates until you threaten to quit, which upsets your parents because your skills are vital for the company’s success. In turn, the tension makes employees fearful for their jobs.

Family fights can be worse than non-family business arguments

Disagreements are not uncommon in any company, but they have the potential to cause more damage within family businesses because relatives often do not have professional barriers to keep the conflict from growing. The fight between you and your brother may get more bitter both in the office and away from work. In contrast, human resources or management would often step in and force the issue to be resolved in a non-family business. When they aren’t related to each other, employees often follow behavioral boundaries that keep disagreements in check.

Careful structuring and mitigation might preserve harmony

A bitter feud can destroy family businesses and relationships. It may be a wise idea to involve impartial directors to mediate when disputes arise. You might also want to discuss ways to structure your policies to follow the barriers that are used in non-family businesses, which address and defuse disagreements before they become too damaging.