Is Working With Family Worth the Risk?

Navigating the Complexities of Family Business in Mauritius

CG One, a project I developed, is a family-owned asset. I'm entrusted with its long-term management, a responsibility I take seriously, especially given my family's history with a business dispute among relatives.

The truth is, building a business is challenging yet ultimately rewarding.

In Mauritius, we often hear cautionary tales of families fractured by business ventures or transactions, with these fallouts frequently rooted in poor planning by previous generations and the traditional dominance of first-born sons as heirs. These stories of missed opportunities and greed are truly heartbreaking.

A 2015 report indicated that 70% of small businesses in Mauritius fail within their first year, and many of the remaining don't survive beyond five. While these figures are now a decade old and current statistics may vary, the underlying message remains: the path to business success is fraught with challenges, especially when family is involved. It's not uncommon to see businesses fail when, for instance, a partner leaves for other employment.

It's crucial to remember that businesses and organizations operate very differently from families. They function best as high-performing teams, built on ideal partnerships where complementary skills and talents are key.

Here are some critical issues to consider when working with family:

Blurred Lines, Conflicting Roles One of the primary dangers is the blurring of lines between family and business. When family members work together, it becomes difficult to separate professional decisions from personal feelings. This can lead to conflicts over roles, responsibilities, and authority, potentially undermining the business's efficiency and creating a toxic work environment.

Communication Challenges Family dynamics can complicate communication within the business. Deep-seated issues or unresolved conflicts can spill over into the workplace, hindering effective decision-making and collaboration. Additionally, the informality of family relationships can lead to misunderstandings and a lack of professionalism.

Succession Struggles Succession planning is a critical issue for any business, but it can be particularly challenging in family-owned enterprises. Choosing a successor based on merit rather than bloodline can be difficult, potentially leading to disputes and jeopardizing the company's future.

Economic Pressures Everyone has bills to pay. A solo business can support one person, but a partnership requires enough income to support multiple partners.

How to Build a Strong Partnership:

Karishma Ardeal, co-owner of the highly-rated Ninja Noodles restaurant in Chemin Grenier, offers valuable insights. "As co-owners of Ninja Noodles, my husband, Amrish, and I have found that a strong business partnership relies heavily on clear communication, mutual respect, and aligned goals. Our complementary skills allow us to navigate challenges effectively and make strategic decisions that support both the growth of our restaurant and the strength of our working relationship. Building a business together has been both a professional and personal milestone."

My personal view is that it's essential to understand the "why" behind creating your business and be aligned with that "why." Secondly, what is each partner bringing to the table, and how does that look in the accounts? Thirdly, how is the agreement enforced and reviewed, as well as how does everyone exit with no complaints after something goes wrong?

Arguments and disputes are unnecessary friction and can hold businesses back. Compounded with an unsupported partner can lead to financial loss.