Family – they have your back when times are bad and are there to cheer you on when times are good. When done correctly, people who go into business with family will benefit from those good feelings, but if done poorly, not only may your businesses fail, relationships may end as well.
So before you go into business with family, here are some things entrepreneurs should think about.
Communication is the key to any relationship and starting a business with family is no exception. Don’t assume who is going to do what role, who gets to leave when there is an emergency, and when you can take a vacation.
Sit down and talk about all aspects of your business as well as scenarios you may encounter. Create a contract and have it signed by all parties.
The benefit of working for family members is they know you – they know how you react to situations, your strengths and your weaknesses. However, family members may harbour resentments.
When working with your family, it’s important not to bring up old wrongs and feelings of perceived favouritism. Each family member needs to keep personal feelings out of the business. They also need to remember to separate business from family life – leave work at the office.
Other pros and cons to working with family include:
- Since you know each other, you can easily match skills and expertise, connecting the best person to the job without going through the interview process.
- As family members have a vested interest in you and your success, they are often willing to work hard to make sure business goals are met. They are willing to make concessions when times are bad to ensure the business succeeds.
- The atmosphere at a family-run business is often relaxed and friendly.
- Customers often like working with family-run businesses as it shows good values, including the desire to work hard, and commitment.
- If you are also hiring outside employees, there is a chance that said employees could feel there is favouritism, particularly if it looks like family members are receiving more promotions, easier work, and better hours. They also may be hesitant to offer feedback in fear of offending family members.
- Sometimes a diverse mix of people bring in new ideas and experiences.
- Leaders at family-run businesses may hesitate to make hard decisions for fear of hurting relatives.
- Relationships can change. The family member who works at the organization may be OK with decisions, but their spouses or children may not be. Conversely, if a business doesn’t succeed, there may be permanent damage to relationships.
Going into business with family is a great idea if you keep the lines of communication open and remember that business is strictly business.
Lisa Day | Contributing Writer