Going into business with friends or family might seem a no-brainer. You’re all on the same page so it should work. However, it’s not that simple. Going into business with family can be a difficult one to navigate. If it goes wrong, you’ve potentially got a lot to work out with your family to salvage your relationships and your business.
Below we details some pros and cons to going into business with family and friends to help you make a decision on what’s best for your new business.
Pros:
You know them well
The upside to doing business with family is that you know your business partners well, understand how they work and are less likely to be caught out by surprising character flaws that could cause your business harm in the future.
They’ll care about the business
Not only are they staff, they’re also personally invested and will want to see you succeed. They will want more than just to be paid and go home, they’ll want the business and will work towards making that happen.
Family owned businesses look good
Branding your company as a family run business can have a positive effect on your customers. People associate family businesses with hard work, tradition and the care and attention you don’t typically see at big brand companies.
You can start the company fast
There’s no need to interview tons of candidates if you’ve got family members who can fill in vital roles in your start-up. This saves a lot of time in the beginning and gets the ball rolling fast.
Cons:
It gets too comfortable
When blending business with personal relationships you run the risk of everyone being a bit too relaxed. This can stunt the growth of the company, allow those not doing their part to get away with it and for awkwardness to take the place of healthy management.
Favouritism
It’s pretty common for those in charge to promote family members over other staff, whether they’re the right fit for the job or not.
This leads to resentment among your staff who aren’t family. Not picking the best person for the job, regardless of what family they’re in could leave your business in turmoil.
Stagnating ideas
When it’s just a small family group who have been there from the start, it’s harder to come by fresh ideas and new approaches that could be just the thing your business needs.
Family conflicts
Whether the conflict is personal or professional, you’ll have a hard time separating the two. Conflicts could make working together much more difficult and could have a negative effect on the family relationship.
Closed-mindedness
Family tradition and shared upbringing might make some people more resistant to change and new ideas. This is particularly so if the business was set up by older generations, with younger family members working for them.
For example, someone who set up the business 30 years ago might be hesitant to get into websites and social media, even if their younger relations suggest it. This can mean slower growth and the risk of being left behind by the competition.
If you do decide to go into business with family, it helps to have a list of rules that everyone signs agreeing to certain roles and responsibilities. Having business meetings separate from family meet-ups are also a useful way to discuss concerns in a professional way, without distractions.
Are you thinking of starting a family business? What are your main reasons or reservations? Please share your thoughts below.