[Ask TBM] Is a Family-Run Business for Everyone?

Many aspiring entrepreneurs consider partnering with family members the right step to starting a business, but is it really?
From small businesses to large conglomerates and corporations, many businesses in the Philippines are family-run. Many aspiring entrepreneurs have looked up to these family-run businesses as inspiration and proof that they, too, can start and run their own businesses with members of their family.
But is partnering with family members and starting a business together really for everybody? What are the advantages of starting a family-run business and how can a harmonious working relationship be established in order to avoid family conflicts?
To get a better understanding of what it means to start and run a business with members of the family, The Business Manual spoke to Koleen Renz Chua Yap, who launched gift shop and bakery Aegyo Cakes at the height of the pandemic with her two sisters and mother.
Did you start off as an entrepreneur or did you have to work your way towards becoming one? What was your journey like?
Renz Chua Yap: We all started working for our mother for a corporate uniform manufacturing business, KRenz Apparell Inc. She loved us very much and named the business after us.
Ever since we could type on the computer, we were incorporated in our family business. Every summer break, literally every free time we had, we would help her in any way we could. I even had a cute little ID of me as the President of my mother’s company at the age of seven. Both our parents were entrepreneurs so you could say it is our birthright. We were surrounded by excellent mentors already without even knowing it.
Our mother’s business existed for 25 years and was one of the top industry players. It was in a cut-throat business of bidding in government accounts for thousands of sets of uniforms. Our mother was a sought-after designer and is a natural artist, something we very gladly acquired. We used to design and sew uniforms for Bangko Sentral, BPI, regional trial courts, and so on.
As sisters raised to be part of the company, each of us naturally shined to handle different departments. We nurtured our chemistry as business partners for many many years for us to be working so soundly together. I, Koleen, handle marketing and sales. I had a minor in marketing in Ateneo and it served my Mom’s company well. In my two years of being in the company, we had a 400% growth in sales.
My sister Kihyan is a natural born leader. She is a figure skating coach and has run our operations and finances ever since she graduated as Entrep of the Year in UST. My sister Karren is the true backbone of our company and our family. She is an author by night and by morning, she holds all our administrative, logistics and everything else in between very very well.
Finally, our mother is our superhero. She holds all departments very well by herself. You can say that she is all our strengths combined, so when worse comes to worst, she is there to save the day. And so it was like second nature for us to be working together from KRenz Apparell Inc. to the now The Aegyo Inc. founded by us sisters solely made for our dreams to have our mother retire from her very stressful work.
We can say that the company was born out of love for our mother. We worked very hard ever since the pandemic struck because we felt that there was a huge decline in the corporate uniform industry. Two weeks in the lockdown, we’re already on our toes creating new opportunities for our family. And so the core of the Aegyo Brand is to #SendLovewithAegyo.
Kindly describe your working relationship with your family. How do you delegate tasks and make sure you have a harmonious working relationship?
Renz Chua Yap: We have immensely great trust towards each other’s integrity.
As equal partners, even though Kihyan is our CEO, we never count each other’s work. It’s more that we match each other’s efforts. As mentioned a while ago, we had several years of practice in terms of working together. We already know our strengths and our weaknesses so it’s like second nature for us to know which tasks will the other sister do or which task she shouldn’t.
Our love language is service. Palagi kaming nagsasaluhan. For example, when one of my sisters wants to go to a BTS concert, which she feels is the most important time of her life, we’d gladly take on her work. However, when she comes home, she will also gladly do more to “make bawi.” We are generous in service and it is a culture that is apparent in all of our staff.
Not everyday will be harmonious, but our family culture is very restorative. We never fight for more than a day. Most of the time, our seven dogs will keep us together because when someone is playing with a cute dog, there is a big chance you will want to play with them and then suddenly we’re all friends again. We also buy little peace offerings for each other. We never confront each other about fights but we always buy snacks for each other afterwards.
It all boils down to the immensely great trust. We trust that our sisters will always have our backs, literally and business wise.
What are the advantages of working with family members?
Renz Chua Yap: There are plenty of advantages to working with family members. If you have the right family members, they will go all out with you without looking for anything in exchange. You will have shared responsibility because your finances are “shared.” There is intrinsically more care inculcated in their work because it is all your business anyways.
If you work for a family business, effort will be highly self-imposed. How much effort you give is equal to how much growth your business will have. And if your finances are collective, you can expect everyone to work towards the goal equally.
There is also an aspect of trust. You’ve seen a person grow, make mistakes and live through life. You know their grades and their strengths and you can use each other’s cars haha. You know their demons and their weak points. You can predict how they will react towards things and of course there is an advantage towards having that knowledge.
You can also have meetings during family dinners. You can knock on each other’s door for reminders. Logistics is very easy because everyone’s just around the corner.
But I believe it only works, if you have that trust.
What are the disadvantages of working with your family members?
Renz Chua Yap: Things can get very personal. Sometimes, age becomes a problem. If you are equal partners, and you are meant to have equal weight in decisions, sometimes the younger siblings can counter the decisions of the older siblings and it could cause problems if you take it personally.
For our family, the concept of age is now blurred not in terms of respect but in decision making. Sometimes, me as the youngest sister, have problems having my voice heard. And that also goes with my older siblings. They sometimes might feel disrespected when I go against them. But these are very minimal problems, I believe we have overcome them in my mother’s business.
Another disadvantage is that sometimes arguments can be very personal. Sometimes, when our mother scolds us, we feel very bad about ourselves and believe all her comments are true because she is our mother. However, we always believe that she means well and she wants us to be the best versions of ourselves. I believe that it’s easier to just shut up and let people fail but my mother works overtime to not let us fail. And that’s why she has endless pointers.
Are you and your sisters able to keep your work life and your family life separate? If yes, how are you able to accomplish this? If not, why is this so?
Renz Chua Yap: I don’t think we keep our family life separate. I think, 20 years in the family business, we have learned to live with it. Work never stops when you have your own business. We’re the type of people who get anxiety when we’re not working. We get very guilty, so we keep the non-work-related occasion very minimal. They say you own your time when you have a business but actually your business owns all of your time.
Nonetheless, this is a choice our family makes, and we’re quite happy with it. We do take vacations when our businesses are closed.
However, we do have respect for each other’s happiness or personal time. But we do try to schedule these things ahead of time. For example, our sister Kihyan coaches figure skaters on Mondays and that is pre-planned so that another sister can take on her work in her absence. Even our dates and church time are pre-planned.
Do you think that starting a business with family members is for everybody? Why or why not?
Renz Chua Yap: Definitely not. I believe it takes a certain type of upbringing or relationship for it to work. Since our family’s relationship is very restorative, blurred boundaries are not an issue we cannot overcome. We’re used to it. As a family, we are also very fair with each other. In fact, when we cook egg for each other and you break the egg yolk of one of the eggs, you will eat the egg with the broken yolk so as not to disappoint the other sisters because it’s your fault anyways.
In those small instances, you can see that we treat “fairness” in a very high regard. And that is very important for business partners. We also know very well the work styles of each other. We are all over-achievers but with different pacing. We are very aware of each other’s pacing so it is not hard to extend grace and understanding towards each other.
However, there are plenty of stories out there where siblings aren’t the best partners for each other. One, because money is a very hard thing to argue about. If you don’t believe your siblings can match your effort, sooner or later, money will become a problem and that will be very hard to overcome.
You have to be honest with yourself from the get-go. You have to fully trust your siblings and if they fail to reach your expectations, you have to be able to fully accept their misgivings. If you want to keep a good relationship with them during or after the business, you have to be okay with the fact that you will give your siblings unlimited chances to redeem themselves.
In business, you gamble with each other. Win or lose, it is still you who chose to do it with that sibling. You have to be prepared for any outcome, and you have to react professionally.