There comes a point where we all consider becoming business owners. But some choose a family member as a partner, as opposed to a friend or going solo. If this is something that you’re currently considering, then do know that starting a business with a family member isn’t perfect.
There will be tons of obstacles to overcome, and you’ll need to adapt to certain things. No matter how much you think things will go according to plan, they can just as easily derail. So with all that said, here are the pros and cons of starting a business with family.
Pros: You Have Common Core Values
No doubt one of the biggest advantages to family-run businesses is the common core value they bring. Chances are, you will implement similar values that will work to define your company’s identity. These values are your biggest strength. Do it right and you’ll certainly have a competitive edge.
Pros: Easy Communication
When it comes to starting and running a business, clear-cut communication is key. By being open and honest with your partner, you will develop a strong business relationship that will allow you to communicate effectively. Businesses are meant to be run effectively, so the more effective you are as a team, the easier you’ll run your business together.
Pros: Loyalty and Commitment
We tend to show unwavering loyalty towards our closest people. Not only that, but we also tend to be more committed to achieving business goals when the business in question belongs to the family. This is one of the strongest advantages when it comes to starting a business with family. Every member of the company is more likely to invest more hours into achieving business goals. You and your partner will sacrifice free time in return for long-term growth and success. Loyalty and commitment are two traits that are very highly ranked in the business sphere. Each family member will use their unique talents and invest a lot more time in making sure the business succeeds. Fortunately, that’s exactly what you’re getting when starting a business with family.
Pros: Lower Salary Costs
While everyone wants a higher salary, that isn’t really a problem when starting a business with a family member. When it comes to turning a small family-owned business into something much bigger, we are willing to also sacrifice our salaries and wages to achieve that goal. This is yet another advantage that family-owned businesses have. It isn’t possible to make financial sacrifices with people we know nothing about and share nothing in common. But when it comes to a business that we’ve started with a family member, riding out a sudden cash-flow crisis is much easier and inexpensive. In many cases, a lower salary is exactly what a startup needs to make it work in the early stages.
Cons: Your Values Change Through Time
Conflicts in business aren’t anything new. The problem with family-run businesses is that once conflicts arise, they can go south pretty fast. While no doubt you’ll have a similar philosophy as co-owners from the same family, philosophies in business change and that can be a pretty nasty thing in your case. If you or your partner shift your values over time, it can negatively impact your business and your relationship as well.
Cons: Power Struggles
No doubt separating life from work is difficult in general, let alone when running a business along with a family member. Sometimes, business roles interfere with family roles and that can create a pretty unpleasant situation. Whenever situations such as this happen, it can establish a power struggle. Power struggles are when two or more individuals fight for dominance over something. In this case, your business.
If you do indeed end up fighting for dominance over the chain of command, it can significantly damage your relationship.
Cons: Things Get Comfortable
No doubt things can get quite comfortable when working with family. Although many wouldn’t allow that to happen, that doesn’t mean they won’t. If family members start undermining the professionalism needed in the workplace, then that will reflect negatively and slow company growth.
Whenever family members are working together, objectiveness is almost always lost. Only the most brutal of leaders will reject favoritism in favor of objectiveness. This is almost always the case when working in a normal setting. But in a family-orientated setting, rejecting favoritism is more difficult. This is mostly because we don’t like rejecting ideas or suggestions from family members or we simply fear that we will hurt them by doing so. If a family-owned business manages to grow to the point where you’re hiring people from outside the family, then those outside employees will be the first to feel the effects of favoritism.