HR & Management
Band of brothers: Why sibling-run firms work
16 min read
29 November 2010
Ten years ago, Mohsin and Zuber Issa (pictured) were working in a petrol station. Now they own 80 of them. The brothers behind Euro Garages aren't the only siblings fuelling Britain's recovery.
Ed Miliband’s recent leadership win and David’s tragi-comic schlep to the back-benches confirmed an old stereotype: that brothers in business are a toxic combination. A quick flick through the Sunday Times Rich List confirms this. There are very, very few brother partnerships. Even fewer sisters. Those siblings you can see are mostly in family businesses, set up by ancestors. Brothers who start a business are rarities. Yet when they work – think of the Saatchis, the Candys and the Barclays – the combination can be potent.
So what’s going on? And does it matter?
One partnership that might pique your interest in the subject are brothers Mohsin and Zuber Issa. Ten years ago they were working in a petrol station in Halifax, “doing the stock, cleaning the toilets”, as Zuber merrily recalls. Now they own 80 filling stations across the north. Euro Garages pulls in sales of £282m with an operating profit of £7.1m. Listening to them tell their story, it’s hard not to see the formidable advantages of going into business with a brother.
At the beginning, life was so tough, only brothers would have stuck it out. “When we started out, we had only £5,000 in cash between us,” explains Zuber, the elder by 12 months. “We took a lease on a garage and had just enough money for the rental. Everything else – the petrol in the pumps and the food in the forecourt – was all on credit. Luckily, we had some very understanding suppliers.” By working painfully long hours and scrimping and saving, the brothers saved £150,000 over two years. The plan was to buy their own station.
Gambling everything they’d worked for on a single roll of the dice seems, in hindsight, like a massive risk. Not the sort of thing you undertake with just anybody. With a brother, though, the gamble was acceptable. “We trust each other so much,” says Mohsin. “We knew we could make it work because we could see how our personalities complement each other. I’m the operational guy, running things day-to-day, while Zuber is more strategic, making acquisitions and seeing what we can bring to a site.”
Their common upbringing helped, too. “We were sure that we could make petrol stations more profitable than anyone else. Our father came to England in the sixties and had bought a filling station. We spent weekends and after school there as children. It’s in our blood,” says Moshin.
The pair believed that filling stations were typically under-resourced. Their idea was to build a store and amenities so that a quick fill-up became a full-scale shopping trip. “We used our £150,000 to buy a derelict freehold site and did it up. When we opened for business and started to compare our sales figures with those of the BP on site before us, we realised how good we were. BP are great at selling petrol, not so good at convenience retailing,” says Moshin. The Issas immediately raised money via bank loans for three more sites, which were upgraded in the same way. All delivered exceptional returns. Lloyds TSB backed the brothers to go on a buying spree. Zuber lured new partners such as Greggs, Starbucks, Burger King and Subway to improve each location. Last year, the pair acquired Bolton West on the M1, ranked Britain’s worst motorway services area, and are spending £5m turning it into one of the best.
The brotherly vibe has permeated the entire firm. “We are all very close – across the company. We promote from within, so that cashiers can become managers and rise though the ranks. We all share the highs and the lows,” says Zuber. And the brothers are still as close as ever: “Fall out? Never. We don’t have time, for a start!”
Another strength of both being bosses is clear: a degree of role division is possible. For the Issas, Mohsin deals with day-to-day operations, freeing up Zuber to work on long-term strategy. It’s a common theme with brothers – exemplified by another pair of over-achievers: Jos and Ben White.
Having started out selling telecoms kit in 1993, the Whites diversified into antivirus and broadband. In 2007, they sold the antivirus business, MessageLabs, to Symantec for $700m. The secret behind the success? Role division.
“Ben is a mad inventor,” says Jos. “He has dyslexia, was expelled from schools and hates to be hemmed in by regulations. I can write and am good at taking his ideas and bringing them to market. We are very different and our skills complement each other.” Ben agrees: “What Jos is great at is turning my mad ideas into reality. He goes off with them and brings them back, beautifully packaged.”
With Jos at his side, Ben has been able to generate idea after idea. The Whites were the first to deliver antivirus via the cloud, started an ISP before most firms had heard of the internet and have masterminded a string of brilliant concepts – some of which never quite took off, such as a remote back-up service (“we were way too early, this was before broadband”); fax to email (“a dead end”); and letterheads for emails.
Of course, there is still friction. “We fought like cats and dogs,” says Jos. “In 2003, I moved to the US to head up our expansion. I needed to move out of Ben’s shadow and prove myself. It gave us both the opportunity to grow and develop on our own. If the business had stayed smaller, we might have found it difficult to work together.”
In even the most successful brother-and-brother businesses, sparks fly. Take the Black brothers, Ben and Ollie, who run the nation’s largest crèche and nursery business, My Family Care. To an observer, it looks like a mature and stable business, with 30 childcare agencies, 34 nurseries and a maternity benefits consultancy division that advises investment banks and City law firms. Far too grown-up and corporate for any argy-bargy, surely? “There is potential for conflict,” admits Ben Black. “We can go from nought to 100 in a matter of seconds, and there have been a few meetings where it’s been incredibly tense.”
Until recently, the brothers stayed at arm’s length, running different parts of the firm. This kept the relationship harmonious. Now Ollie’s come over to the benefits consultancy side to work with Ben. “Suddenly, I’ve got this idiot brother in meetings and he’s got the same shareholding as me. There’s tension,” says Ben. “Fortunately, we’ve matured and we have structure and non-execs, so it doesn’t escalate.”
There’s clearly a lot of affection between the brothers. Ben eulogises Ollie’s sales and marketing talents, which work well with his own strengths. “You’ve got to trust each other and respect each other’s commercial talents,” says Ben. “Without that, it won’t work.”
However, Ben doubts that the moments of conflict are beneficial. “Clashes are usually about ego, which isn’t particularly productive. What I think is good is that we both challenge each other. As you get older, you develop a lot of foibles. You need someone around to tell you when you’re going wrong. A brother can do that for you.”
Amusingly, Ben admits there are four brothers in the Black family, all entrepreneurs, but only Ollie and he are able to work together. “The eldest, Adam, runs Feather & Black, selling bedroom furniture from 30 stores. He’s hugely successful, but he’s the most difficult. He’s always right. Our other brother Dan runs a design consultancy, Black & Blum. Our father was an entrepreneur, so it runs in the family, but I don’t think I would have worked with any of the others. Too much tension!”
One secret ingredient to the harmony at My Family Care is a third partner. “Ben and I were joined shortly after founding the firm by Amanda Coxen. We have 45 per cent each and she has ten, so we can’t get over 50 per cent without her. She is absolutely essential. We didn’t plan it like that but looking back, her presence has been brilliant.”
Perhaps Harriet Harman could have played the same role for the Milibands. Or, maybe not…
Sisters are doing it for themselves
But how about the girls? Is oestrogen as volatile in the boardroom as testosterone?
Sarah and Louise Meakes are the founders of Sandinmytoes.com, an online swimwear boutique. Are there cat fights? “We are very close and get along really well so it’s calm and peaceful for the most part,” says Sarah. “There’s an understanding between us that can only come from being sisters – communication is much quicker and easier and there’s no tiptoeing around each other as we are not worried about offending each other. We know each other so well it doesn’t matter.”
Louise says the coupling is harmonious: “We previously worked in two companies together, renovated a house together, travelled together and have lived together. I wouldn’t have done any of it without her!”
Louise says they teamed up because of the loneliness of being an entrepreneur. “Being in business with a sister definitely gives you confidence. It is much less lonely and in tough times you have the support of somebody you have known all your life. Even when times are tough and there are disagreements, you know they won’t last long. You’re family; you have to get over it. There is no question of one of us leaving the partnership – our mum would kill us!”
This is a common sentiment among siblings. Being in business with a brother or sister might be fractious and tricky, but much less lonely! As Ben Black puts it: “It’s lonely running a business. The highs you feel, you can’t share because you are worried about the future, and the lows are low – and pretty lonely. So it is fantastic being able to share those experiences with your brother. I remember when we tried to buy a business from Bupa a few years ago. We spent a lot of money on very expensive offices to move the staff into. The deal was pulled at the last minute before signing. We were gutted. I would have absolutely hated to be alone at that moment.”
Jos White fully agrees: “It’s really important to have a partner, especially in your first business. Starting up is a tough thing to do on your own; to have a partner you trust is so valuable. You need someone to bounce ideas off and to celebrate with when things go well. The ultimate partner is a sibling. You understand them and trust them more than anybody.”
So there you go, Ed and David. The brother partnership can work. It can bring out the best in both of you, allowing you to focus on your particular strengths. Best of all, you don’t have to be lonely at the top. What’s the point of striving to be prime minister if there’s no-one to share the glory with you? Go on lads, be brave and pick up the phone.