It’s natural to want to go into business with your family. After all, you have a pre-established relationship, you know you can trust your relatives, and chances are you have similar visions for the future – what can go wrong? Unfortunately, quite a lot, which is why there are so many horror stories about lifelong family feuds that stemmed from business disagreements. Working with anyone in business is tough, though whether it’s more or less difficult to work with your sibling/parent/cousin depends on your particular relationship. To go into business with family is undoubtedly more complicated than doing business with a stranger, but it can work, just as long as you follow some basic guidelines.
Should You Go Into Business With Family?
Decide On an Ownership Split
Decide who owns which percentage of the business, then put it in writing. You may decide on a 50/50 ownership split, but this only works if both people are putting the same amount of time and resources into the business. Conflict arises when both partners own equal shares, but one works more than the other. Avoid arguments by deciding in advance whether you will both work full-time or whether one person will work part-time. Once you’ve discussed what you’re both willing to put into the business, you can create a formal ownership agreement.
Create a Legal Agreement
Hire a lawyer and create a legal agreement – do it now, before you so much as earn your first pound. You may need to answer some tough questions, such as what happens to the business if one of you dies: how will that person’s share of the company be distributed? One common problem is that a business partner feels they are entitled to full ownership of the company once their partner dies, but that person has been otherwise influenced to sign it over to someone else.
What If One of You Dies?
If your business partner dies and their share of the business goes to someone else, you may be able to claim back your share by hiring an estate litigation attorney, especially if you think they were unfairly influenced. However, it’s best to avoid getting into this situation by creating a legally binding agreement that covers sickness and death when you first go into business.
Business Is Business
There’s a reason why so many experts say not to mix business and relationships. Business is business, and it’s essential you don’t let your personal feelings get in the way of that. We’re all human of course, which is why you need to check in with your business partner regularly and make sure you’re both on the same page. Sit down once a week (or once a month – whatever time you can spare) and hash out your thoughts and feelings about the business arrangement.
Nurture Your Relationship
It’s also necessary to nurture your family relationships away from the business. Schedule regular meals out together or movie nights where you hang out as relatives or friends and don’t talk shop. Don’t let family fueds influence business relationships, and try to keep things professional in the workplace. All of this is easier said than done, but practice makes perfect – and there are plenty of success stories to prove it.