Business ideas between family members form frequently and easily, as sometimes those are the people we spend the most time with and bounce ideas around with the most. However, it is not always the best idea to go into business with your family members. Make sure you carefully evaluate the following pros and cons to forming a business with family members before diving in head first. If you are still unsure whether you should jump into business with a family member after reading the following, contact the business law attorneys at the De Cardenas Law Group for a free consultation.
Pros to Forming a Business With Family Members
With 5.5 million family businesses in the U.S., it is clear that there are many pros to getting into business with family. The following is a list of some of the most important benefits:
- You know what you are getting yourself into. You probably know your family members better than you know anyone else, so you are less likely to be put off by any quirks or uncomfortable habits of theirs, since you have seen it all before.
- You are not afraid to speak your mind. Since you know your family members best, you are also less afraid to speak your mind and be honest with them when it comes to criticism and praise. Having this open channel of communication can be advantageous for your business.
- Less small talk means getting more done. Unlike with non-family business partners, you will not have to spend time making small talk with your family member, who likely already knows what you did over the weekend, when your kids’ sporting events take place, and where you are going on vacation next month. By cutting down on the small talk, you can utilize your time at work more efficiently.
Cons to Forming a Business With Family Members
While there are many pros to forming a business with family members, there are plenty of cons as well. Below are a few of the most important factors to consider:
- Work conflicts can become personal conflicts. The most dangerous and potentially damaging effect of forming a business with a family member is that your conflicts at work might seep into your personal life and create a rift in your personal relationships with your family members. The last thing you want to happen is to have your new business destroy your relationship with your family. As such, this is a key point you will want to talk over with your family members before forming a business with them.
- Lack of leadership roles. Having such a close and personal relationship with your business partner can be a good thing, fostering a more casual and relaxed workplace. On the flipside, it can create confusion over who is in charge of which aspects of the business, and who gets the final say. In order for a family business to succeed, you will have to define clear roles that each family member has so that everything gets taken care of, and no one steps on the other person’s toes.
There are many more factors you should consider when deciding whether to form a business with your family member, and the attorneys at De Cardenas Law Group can help you analyze how to move forward. Contact us online or at 626-577-6800 (Los Angeles) or 415-590-4869 (San Francisco) today to schedule an appointment with one of our business law attorneys.