3 Tips for Running a Successful Family Business

My first actual job (besides selling baseball cards and ripping people’s flowers out of their yard and selling it back to them) was bagging ice at my dad’s liquor store.

Over time, I grew it to a $60M revenue company.   

I’ve learned so much from my father and working through our differences to build a meaningful family business. Here are a few tips I have for anyone interested in starting or joining a family business.

 

1. Practice radical candor

Radical candor is the hardest thing to do when you’re running a family business.

But it’s also the most important.

When you’re working at a job, you could have a disagreement with your boss that affects your relationship at work. But in a family business, that disagreement could bleed into your personal relationship.

For example, if you’re a young kid getting your “at-bat” in the family business, you might believe in a different way of doing things compared to your parents. You might want to spend money on social, but they want to stick to direct mail. You might believe in building a brand, but they’re stuck in “sales mode.”

The best way to convince old minds is by being radically honest about what you believe. Even if it sounds disrespectful.

Tell them they’re old. Tell them they’re out of touch. Do what you have to do to get a chance to prove yourself.

(Side note: Radical candor when telling my family about social media and marketing is a lot easier than, say, giving them negative feedback about their performance).

The dynamics in a family business make other decisions harder too.

For example, this caller, Edgar, on the AskGaryVee show once asked me how to ask for a raise in a family business.

Edgar was afraid to ask because he loves his family and doesn’t want to seem like a “leech.” But he feels he deserves more for the work he’s doing.

I loved this question because I could tell he was coming from a place of good intent. But the truth is, the best thing you can do for your family is to “get yours” first. If you feel like you deserve to get paid more but you don’t ask for it because you love your family, you’ll “crack” and resent them eventually. That’s bad for both of you, long term.

When I think about when my family and I have been at our best in business vs our worst, the biggest variable is always the number of issues we’re holding close to our chest.

2. Create boundaries around your skillset

 

You’ve got to have clear boundaries when it comes to what you handle running a business that your family members don’t question.

When we were starting VaynerMedia, my brother AJ knew exactly what he was good at and I knew what I was good at. If I ever crossed the line and tried to handle AJ’s role, he would get upset. If he tried to handle my role, I would get upset.

(Keep in mind that giving your opinion on how a partner should handle their role is different from actually trying to handle it yourself).

The best way to come up with responsibilities for someone new in a family business is by giving them a shot at handling something, and see how they do.

For example, if my daughter turned 23 and wanted to go into business with me, I might give her some money from our marketing budget with 1-2 employees, and tell her to run it. The way she runs it would prove whether or not she can handle that area of the business, and also act as a proxy to how good she’d be in other areas.

It’s what I did at Wine Library. When my dad gave me a shot to grow the business, I took it from $3 million to $10 million in revenue real quick. And that was the end of the debate.

 

3. Put love over money

Ultimately, the single biggest thing to remember in family business is to put love over business.

When building VaynerMedia, the knowledge that my brother AJ and I love each other more than we love the business got us through a lot of fights. We care more about each other than we care about “getting our way.”

For example, I made AJ a 50/50 partner in VaynerMedia even though the company started on the back of my brand. Even though I had leverage I had built with getting results for Wine Library.

I thought it was more important to start our relationship off on the right foot instead of trying to maximize my short term gains.  

AJ is an incredibly self-aware person who understands my strengths, too. When we’ve gone on to start other projects like my venture fund, he came out and said I should get a bigger piece of the upside.

Putting love over business got me through some really tough times at Wine Library when I was building the business with my dad.

My dad’s an old school guy who didn’t like it when I changed my mind when it come to our strategy. He wanted to stick to decisions. He’s much more cynical than I am, and things that didn’t affect me affected him deeply.

Because of that, there was a lot of friction between us. But every time we’d argue for long periods of time, I’d default to remembering that we’re family and we love each other first. It’s been huge in maintaining the relationship.

 

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