Going into business with family is not an uncommon thing. Actually, according to the Family Owned Business Institute of Grand Valley State University, there are 5.5 million family businesses in the United States and contribute 57% of the GDP and employ 63% of the workforce, roughly over 98 million people.
But not just that, family businesses outperform non-family ones by 6.65% in return on assets in the States. It’s safe to say that it’s a good idea to go into business with them. You can even have joint access to small business financing that you can find in fintech like Camino Financial.
Yet, there are a lot of nuances that you need to take into account before you set up shop because nothing breaks families apart like money problems and, after all, your biggest asset is the people you love. Take a look at some of the pros and cons of going into business with your family.
Pros
1. Commitment to the cause
Your family will want the business to succeed with the same passion as you so it’s safe to say that everyone involved will work hard, ethically, and with drive, and in so, this will ensure you make headways in your strategy.
2. Skip intro button for human interaction
You won’t waste any time getting to know people, their strengths, and ways to work which means less time into the actual working model. You already know what you need to know and can get straight into work.
3. Heritage building
With the idea of creating a new heritage for the next generations, for the family itself, your family team will look for better ways to make the company succeed, to leave behind a legacy, and to give others new opportunities.
4. Company
You won’t be alone in the path of success and hardship. The people closest to you will live in the flesh of what is happening in the company and what will help you make hard decisions, celebrate triumphs, and work with the same goal on the horizon.
5. Next-generation preparation
When the next generation becomes interested in the company, you can always show them the ropes, explain what is needed for your strategy and have them prepare themselves to take on the mantle.
Cons
6. Zero separation
Working and living together, visiting on weekends, and family reunions can be exhausting. You’ll need to find a strategy to be separated sometimes and not talk about family issues at work or the other way around.
7. Lack of structure
Family members can be inclined to bend the rules a little more, coming in later than everyone should, take days off, and have privileges that wouldn’t normally have if working on another company.
8. Nepotism
Not everyone in the family should have a C Suite position and you will have to fight the need to “help” your family by placing them in those places, simply because they are your flesh and blood. Meritocracy will be key to avoid this.
9. Unqualified workers
“Hire my son, he needs a job” is something you’ll likely hear. But the thing is that’ll need a certain profile in every position and, if the said son doesn’t have it, you could get into a lot of trouble. Hire what you need, not what you are obliged.
10. Sensitivity
There will come a time when you have problems, there is no doubt about it, and spending time together will mean that everything you do at work can be felt and carried at home and the other way around. Don’t let business break your relationships and enjoy the family reunion.
It’s important that, whenever you are considering going into business with the family, add them as partners, or looking for small business financing, you put everything down on paper. Write contracts, establish rules and follow up on each other’s commitments. This way, you’ll protect the company with structure, strategy, and planning and your family from breaking apart.
Laila Azzahra is a professional writer and blogger that loves to write about technology, business, entertainment, science, and health.