Forming your own business can be very rewarding, but it isn’t without challenges. The harsh reality is that a significant number of startups fail within the first year of launching. This doesn’t have to be the case for you though.
You’ve had a business idea for some time now and you’re getting closer to opening. You’re thinking about keeping the company within the family. Is this a good idea?
Relationships founded upon trust
Trust is certainly a prerequisite for business partners and staff, and you trust your family more than anyone. You know that your family members aren’t going to run off with the proceeds or fail to turn up each day. You have grown up together with the same core ethos and values.
Longevity for the business
Your business is more than the present and immediate future. You’d like it to be passed on to your children and future generations. Keeping the company within the family can facilitate this. When it comes to your retirement, you can be safe in the knowledge that your family name and legacy will live on.
There are some drawbacks
Business operations, including family-owned businesses, don’t always run smoothly. You also need to consider the potential drawbacks of working with family members. Could a business dispute jeopardize your personal relationships? Are your family in it for the right reasons, or are they just eager to please you? Whether it’s your staff or business partner, you want to recruit based on merit and not personal connections.
A family business should still operate on a solid legal foundation. As you form your company, make sure you have some experienced guidance behind you.