Going into business with a family member can be a great way to get your business off the ground. After all, you already know and trust this person, so you don’t have to worry about whether or not they have your best interests at heart. Plus, you may already have a built-in support system in place. But starting a business with a relative isn’t without its challenges. Here are some things to consider before taking the plunge.
Pros and cons of starting a business with a relative
There are several benefits to starting a business with a relative.
A big benefit is that there’s already a level of trust and respect that has been established. This can be helpful in avoiding misunderstandings and miscommunication down the road. You likely have similar values, which can make it easier to find the middle ground when disagreements inevitably arise. And since you already have a personal relationship, this hopefully means that you can maintain open and honest communication—something that’s essential to any successful partnership.
Of course, there are also some drawbacks to starting a business with a family member. One potential downside is that personal conflicts can bleed into business decisions (or vice-versa), making it difficult to resolve issues in a constructive way. Because you already have an existing personal relationship, it may be tempting to let things slide instead of holding each other accountable for meeting deadlines or doing your fair share of the work.
If things go wrong in a conflict between you and your related business partner, it can damage your personal and professional relationship beyond repair. And, even if things go well, there’s always the risk that your business will strain your mutual relationships for many reasons. In the beginning, it’s impossible to logically predict everything that could go wrong while you’re running on a high of excitement at the thought of starting your own business.
Ultimately, the most important key is to be honest with each other about your expectations and boundaries from the start so that you can avoid any potential problems down the road.
How to decide if it’s the right decision for you
Starting a business with a relative isn’t a decision to be made lightly. If you choose to ignore the golden rule of “don’t hire someone you can’t fire,” you need to set aside personal emotion while you figure out some of the important details upfront.
First, ask yourself if you’re compatible as business partners. Do you have complementary skills? Are you able to communicate effectively? Do you share the same values and goals? If not, it’s probably best to steer clear.
Think about what kind of company culture you want to create. If you’re not on the same page about this, it’s going to be difficult (if not impossible) to build a cohesive team. Your company vision and mission will drive how you do business, for better or for worse.
Consider the financial implications of going into business with a relative. Do you have complementary financial goals? What happens if one of you wants to sell the business down the road? What are your expectations for salaries and dividends?
It’s important to clearly understand each other’s roles and responsibilities within the company. You don’t want things to get messy if one person feels like they’re doing all the work or if there’s a disagreement about who makes what decisions.
Finally, you’ll need to consider the potential for conflicts of interest. If you’re not sure you can separate your personal and professional relationship, choosing another business partner is probably best.
What to do if things go wrong
It’s important to have a contingency plan already drawn up for what to do if things go wrong. Like any other contractual agreement, you should clearly understand what would happen if one person wanted to sell their share of the business or if a disagreement couldn’t be resolved. How would assets be divided? What would happen to the company? What’s the plan if one person can no longer fulfill their role within the business?
It’s worth considering hiring an outside mediator or lawyer to help resolve conflicts, especially if they start to impact your personal relationship. Sometimes, it’s helpful to have an objective third party to help facilitate communication and come up with creative solutions.
Additionally, ensuring you have clear boundaries and expectations from the outset will help prevent misunderstandings and disagreements. If possible, put everything in writing so that there’s no confusion about what was agreed upon.
Finally, establish clear communication channels so you can constructively address any issues that come up. It may seem like overkill, but it’s always good to have a communication system that includes a paper trail. Don’t discuss anything important without getting an agreement in writing, or at least send a written follow-up that you can reference in case of a future discrepancy.
How to make the relationship work in the long run
If you’ve made it this far and you’re determined to make this work, there are a few things you can do to improve your chances of success.
It’s important to nurture your personal relationship. If you’re not on good terms, it’s going to be that much harder to work together effectively. Make time for regular catch-ups (even if it’s just a quick coffee or lunch), and keep the lines of communication open.
It’s helpful to set aside some time each week or month to check in with each other about how things are going. This is a good time to discuss any problems or concerns, as well as to celebrate successes. Having regular check-ins will help prevent small issues from turning into big problems.
Additionally, it’s important to maintain personal boundaries, including creating a healthy work/life balance. If one person is working harder than the other, this is the perfect environment for resentment to fester. Be clear about your expectations and what you can reasonably commit to the business, and be respectful of each other’s time outside of work. If it seems like there’s an unfair distribution of the workload or an ongoing power imbalance, it’s important to address this head-on.
Finally, remember that you’re in this together! Try to approach challenges from a collaborative perspective, and be willing to set aside personal egos for the sake of the business.
So, should you start a business with a relative? Ultimately, this decision comes down to weighing the pros and cons for yourself and seeing what feels right for you and your family member. If you decide to go into business together, set some ground rules early to avoid potential conflict down the line. Also, remember that communication is key in running your business’s day-to-day operations and preserving your personal relationship.
Whether you decide to partner with a relative or choose to go at it alone, the Paint EZ franchise opportunity offers a great way to get a successful business up and running quickly and with minimal hassle. With our support, you’ll have everything you need to hit the ground running, including a proven business model, marketing and advertising assistance, access to our network of suppliers, and much more. Contact us today to learn more about the Paint EZ franchise opportunity!