REI with your siblings? Can mixing family and business work?

[David Magnuson]

I'm in the beginning discussions and research of going into REI with my two brothers. We don't want business/money to be something down the road that could potentially harm our relationships.

Has REI with siblings as business partners worked for you or somebody you know? What made it successful (or unsuccessful), and what kept them together or broke relationships?

[Marc M.]

@David Magnuson, I think going into business with family (or friends) can work really well...but I have also experienced some pretty difficult situations partnering with my brother on two separate properties. Generally speaking, when people start out in a business or any kind of relationship it's all optimism and excitement in the beginning (ie: no one plans for a divorce the day they get engaged!). But, you need to plan for the end in an partnership...life changes, people have different goals etc. My main suggestions are this:

1) Create a vision for you business. This is really to get on the same page with your partners. Are you doing one project or ten? Are you flipping, brrr-ing, wholesaling, etc? How long will you be in business? Short term or Long term? What is your plan B, or plan C? What is your competitive advantage in your market...will one partner make acquisitions while the other does the contracting work?

2) Get an attorney to draw up your LLC's operating agreement (and make sure it spells out how a partner can exit!) If you only file articles of organization for your company you will invariably default to your state's statutes of LLC's which are usually pretty strict and often require a judicial dissolution if there is gridlock amongst management) This is money well spent on an attorney!

3) Plan for disputes. It's easier to be diplomatic and reasonable before a conflict arises, so put something in writing about how you will handle disagreements, because THEY WILL HAPPEN. And if all else fails in your conflict resolution plan, put in a mediation / arbitration kicker if things really go afoul. You want to avoid going to court at all costs because it COSTS A LOT. 

Even though I have war stories from going into business with family I still think it can work...if only I knew now what I didn't know then! And like @Perry Ivy mentioned about birth traits, I will add to that: If you ever had conflicts with your siblings growing up, you can bet they will resurface again....what will appear to be a conflict with your business will actually turn out to be some deep-rooted, unresolved issues from childhood once you start drilling down to resolve the disagreement. 

Good luck to you!

-marc