If you think that “emotion” and “accountancy” are words that can’t go together, then you haven’t spoken to Tom Gothe recently. The 29 year-old German is the fourth generation of his family to work for the accounting firm, Gothentreuhand, that his great-grandfather set up and where his grandfather and aunt still work.
“There is a lot of emotion in this business,” he says, “when I worked for a non-family firm after finishing my studies I felt that there wasn’t so much. You didn’t get the same feedback, or feel the same motivation.” Gothe joined the firm after finishing his masters degree at the Frankfurt School of Finance and Management – but not before starting another family business of his own.
In 2009, just as he started at Frankfurt, his father suggested that they set up a business together. “He had worked with BP in the UK and he is very good at marketing,” says Gothe, “and he said that he could explain some parts of setting up a business and I could do others, such as the market research. We sat down and wrote the business plan together.”
The idea was to start an art travel business, which would take groups of amateur artists on trips to beauty spots for a week’s painting with a professional tutor. Gothe’s father is a keen painter and used to go on painting holidays with a friend, so the business was also a passion for him.
Artistravel, as the business is called, has clearly also become one for his son, too. “One of my best friends is working with us, and more and more friends and family, we have 12 or 13 in the business now. We do customer surveys after the trips, and it’s really satisfying when people say they loved their time and met interesting people,” he says.
In the first year, 2010, Artistravel had 120 customers. Last year it was 1,000 and they are looking to expand internationally.
With the launch of this entrepreneurial business, Tom’s family has taken a very big step to ensuring the longevity of their core business. Most people agree that in a fast-changing world businesses have to be able to adapt to thrive – to be entrepreneurial. But the question becomes: how do you foster an entrepreneurial spirit without destroying the business, or causing friction in the family?
The good news is that families ought to be good at promoting entrepreneurship. Much sociological research has shown that the concept of entrepreneurs as lone wolves, forces of nature who create and drive businesses is a myth.
“Most entrepreneurial activity is essentially a ‘group’ effort with family groups – spouses, cohabiting partners, and kin – constituting an essential mechanism of the venture-creation process,” says a paper by a group of American and British academics. Business-creation is about networks of trust, expertise and funding, which families excel at providing.
To be successful, though, entrepreneurship has to be done right. A 2011 study of 199 Swiss family firms found that the more generations that are involved in a business, and the more entrepreneurial activity there was, the more conflict there was and the lower that firm’s financial performance. However, the result was reversed when the generations were able to interact in “an atmosphere in which employees feel encouraged to express their ideas and criticism.” The better the communication, the better the business’s performance.
The ideal, perhaps, is that multiple generations of a family participate on a business which is insulated from the family’s core one, so it can’t be damaged if things go wrong, and the older generation feels more relaxed about delegating decision-making. This would allow the next generation to experience entrepreneurship in a safe environment, and also be a training ground for business interactions between family members. These lessons can be applied to the core business at a later date.
By chance or design, this is precisely what Tom Gothe is doing. He is learning that working with family members can be rewarding, but has its downsides.
“Most of the time it is really good, at a normal company you have to schedule a meeting to talk about the business, but when you have a family business you do this talking all the time, after a while the conversation automatically comes to business, but we don’t feel that it is business thing, it’s a family thing,” he says. The flip-side is that “you don’t have time to totally relax when your family is mixed with the business”.
For now Gothe works full-time for the accounting firm, and devotes as much time as he can to Artistravel. He envisages splitting his time 50/50 between the two in future. But the family has laid the foundations for both to flourish.