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Learning to Keep Personal Separate From Professional

Understanding emotional dynamics and establishing clear boundaries can help firms stay out of stormy waters.

November 22, 2000|CYNDIA ZWAHLEN | SPECIAL TO THE TIMES

As little girls, the sisters dreamed of building a mini business empire to hand down to their children. Now partners in an Orange County hair salon, the siblings have the children but are finding the business empire a bit harder to accomplish.

Capital, typical sibling differences and conflicting visions have been unexpected challenges for the owners of the J'Elle J'Elle salon. A possible high-stakes expansion has become another source of pressure.

"We kind of saw it all through rose-colored glasses when we started," said Julie Casper, 37, the oldest of four sisters, three of whom own the salon together.

Four years later, those glasses are broken.

The sisters enjoy working together, value the trust they share and say their respect for each other's strengths has grown. But because the salon is not yet profitable, one sister still has to work a second full-time job. Making proper decisions can feel like a high-stakes game, with the business, family relationships and livelihoods at risk.

The sisters have pinned their hopes on a plan to turn the shop into a day spa. The expansion and upgrade would be made to attract more upscale clients from the surrounding Dana Point neighborhoods, the sisters said. Just how fast they should move and where the money will come from, though, has not been agreed upon.

"Joanna and I really want to go ahead," said the salon's skin specialist, Laura Mayne, 35, referring to her younger sister Joanna Dobson, 30, the hair color expert and stylist. The salon can't go on as it is, she said. But she worries that Casper, on maternity leave with her first child, might be a little more hesitant to make the commitment.

Casper said she is concerned about investing too much, too fast in the salon's aging building. "We all need to agree, because we'd all be liable," Mayne said.

Family business expert Otis Baskin sees the situation as an opportunity for the sisters to step back from the daily bustle of the business to lay the foundation for a more professional organization. That foundation is especially important for a family business. It can support family members through difficult decisions such as the expansion issue the sisters face, he said.

"The key in family businesses is to have the family members separate their family relationships from their ownership positions from their management positions," said Baskin, a senior associate of the Atlanta-based Family Business Consulting Group and dean of Pepperdine University's Graziadio School of Business in Malibu.

Organizing the business to achieve that goal will require that the sisters learn to manage themselves within their business' "emotional system," psychologist Fredda Herz Brown said.

"Being in business with your family means accepting a whole other level of management that makes it more complicated but also makes it a richer experience," said Herz Brown, managing partner at Metropolitan Group, a family business consultancy in Tenafly, N.J.

Learning as much as they can about the emotional triggers that set them off and make them act in ways they don't like is important for all family members in business together, she said. Childhood behavior patterns can derail adult family business relationships, she said.

In a three-person group, for example, two members can tend to talk about the third in a negative way, she said.

"That can be really dangerous when you are in business together," Herz Brown said.

Casper, who said she typically can't keep anything in and always says how she feels, said an early blowup with Mayne over the business was an eye-opener for the sisters. The two women did not speak for two weeks, which she acknowledged was not conducive to running a business together.

Casper has done some reading on relationships since then and has tried to avoid a repeat row.

The sisters are on the right path to learning how to handle confrontations and deal with issues as they come up. It may be uncomfortable for family members, but it's important, Herz Brown said.

"Not dealing with them only leads to a later breakdown," the consultant said.

For families stuck in old behavior patterns, an outside mediator, even a trusted family friend, can serve as a neutral third party to help keep business discussions professional and productive.

Consultant Baskin said he often suggests family businesses begin to build a more professional organization by starting with a mission statement that incorporates their business goals and family values. The mission statement can guide them as they weigh the risks and costs, both personal and financial, of their business decisions.

Family members also should have a clear picture of their personal, management and ownership relationships, Baskin said. After appropriate legal and tax-related input, the sisters should set up a board of directors and begin formal quarterly meetings to decide how ownership, compensation and liability will be shared among them, he said.

If two sisters working in the business eventually draw a salary and the third, on leave, does not, for example, what is a fair division of any profit, after salaries, the business generates? How much will be reinvested in the business?

It's also important to spell out exit and entry rules for family members, an important part of any expansion plan, Herz Brown said. Such rules are part of keeping the boundaries between family and business as clear as possible, she said.

The last few years have been challenging for the salon owners, but the sisters remind each other not to take the process personally, and that, in the end, family comes first.

"Being close as sisters is the most important thing," Dobson said.

*

Does your family business need or have a creative solution to problems faced by family businesses? Write to us at Family Business, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012 or send e-mail to cyndia.zwahlen@latimes.com.

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