Starting a family business might be your big idea of the moment! After all, you’ve got a healthy relationship with plenty of family members, and you’re all excited at the idea of putting a business together straight from home! What could go wrong?
Don’t let your familiarity get the best of you. When starting a business with your loved ones, you need to be as professional as you would with any standard co-worker or high powered investment partner. And a family business has both its pros and cons. You need to know about both before you go any further.
You’ll Get More Commitment From Staff
Because they’re family members! And when they’re family, you all have the same goal in mind. You want the business to be a success, and you all have an equal stake in ensuring it happens. Often this translates into less time off, more initiative taken, and far less time taken on completing projects. Of course, there can always be a ‘weak’ link in the chain, but you won’t have to deal with such an issue outside of family lines.
It’ll Cost Less to Get Started
When you only have family members ‘on the board’, then you don’t need to pay very much in the way of employee wages. This means you can save a big chunk on payroll, as well as long term costs in employee acquisition and turnover. That can give you a bigger starting budget by at least 25%.
In case of a business turndown, this also means you’re less likely to suffer a drop in your profit line. After all, family members tend to be happy to take pay cuts when the business isn’t doing so well, as you’re all working together towards a common, shared goal.
A Family Breakdown Can Mean a Business Breakdown
If anything happens to your relationship, the business could suffer. Siblings falling out, parents and children deciding to go low or no contact, or a husband and wife ending their relationship on amicable or not terms. Any of these things could happen and we never know if they’ll turn out OK.
In a scenario like this, it’s best to get a family law firm involved. If you can work towards a positive solution for everyone involved through the courts, it bodes well for your business’ future.
It Can Be Hard to Grow
If you’re only choosing employees and hearing ideas from within your family, you may suffer from a lack of perspective. You may all think alike, and you may all have similar experience, and that can make it hard to bring new, fresh, and fun ideas to the table. As a result, you may find your business growth to be slower than a competitor’s acting in the same niche or working on the same street.
Starting a family business can be great, but it can also be a disaster if things go wrong. Make sure you keep this possibility in mind throughout.