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Ever dreamed of starting a family business? Investing in a business opportunity with friends?
Businesses owned & operated by families can have incredible staying power. Volkswagen, Samsung, & Nike – all family-owned companies – are among the world’s most successful, leading brands. It can be fun & rewarding to work with family & friends. However, before you hire the people you care about most, it’s wise to consider the pros & cons of working with family & friends in business
When you hire family & friends, working together can feel comfortable & pleasant. You can vouch for their work ethic & values upfront. You already know their natural talents, abilities, preferences, & skill sets – as well as their strengths, weaknesses, & how you can best work together.
You’ll save time & money when you have a crew of committed workers ready to go before, you’re set to launch. With family & friends willing to help you, you won’t have to screen & interview candidates or following up on background checks & qualifications. You can hit the ground running, focusing your efforts on generating income & profit.
Tradition is Seen as a Strength
We can easily build strong brands on the values we associate with family, such as honesty, trust, & enduring relationships. In fact, a recent Harvard Business Review study showed that customers prefer family-owned businesses for their perceived stability, trustworthiness, & consistent service.
With family & friends in business, it’s challenging to change negative behavior or communication patterns. Also, it can be extremely difficult to confront a loved one when they aren’t acting in the best interest of the company. The temptation to avoid conflict or hurt feelings can make managing a friend or relative difficult. Sometimes, it can become a serious liability.
To avoid conflict, always practice clear communication. Share business policies, practices, & expectations just as you would with any employee.
The Company Has to Come First
Building a profitable & sustainable business requires effective management, without exception. That means sometimes it may be in the best interest of the company to re-train an employee for a different role, ask a worker to take on additional responsibilities or, in some cases, let someone go.
When it comes to difficult personnel matters, it can help to seek guidance from an independent advisor.
Too Much Tradition Can Hold You Back
When a family business does things the way they’ve always been done, the company can suffer from a lack of diversity & innovation. It’s essential to keep an eye on market trends & changes in your industry, so you can adapt quickly & avoid missing opportunities.
Solution: Set up a board consisting of family members & an equal number of independent advisors.
Final Thoughts on Family & Friends in Business
Because family members & friends are personally invested in your business – both emotionally & financially – they can make fantastic employees. They’ll work hard, put in the extra hours when needed, & do everything they can to ensure your venture is a success.
The biggest challenge can be to draw the lines between work, family, friendship, & home. As an employer, it’s crucial that you set boundaries, practice clear communication, & be willing to make difficult decisions so your business & personal relationships can thrive.
If you decide to work with or employ family & friends in business & get the right balance & dynamics, you’ll get the best of both worlds. Staff dedicated to your success & family happy with their contribution to the business’ success.
Don’t forget, you’ll also need accounting & financial guidance. We’re here to support you in your success.