Should You Start a Business With Friends and Family?
Entrepreneurship is all the rage these days — and has been for many years — and entrepreneurship will continue long into the future, becau...
Entrepreneurship is all the rage these days — and has been for many years — and entrepreneurship will continue long into the future, because we can. The pandemic set up a perfect groundwork for entrepreneurship to begin, move forward and thrive. Being your own boss and creating your dream company is the ideal scenario for thousands of Americans. However, becoming an entrepreneur is no walk in the park, and a lot of your success will come from who you have by your side.
Should You Start a Business With Friends and Family?
One of the first major decisions you’ll make is who to start a business with. You can try to do everything by yourself, but you put yourself in danger of becoming overwhelmed by the tasks at hand and the many hats you wear in entrepreneurship. Your next option comes down to partnering with friends and family members or an unaffiliated third party.
There are pros and cons to working with both types of people in creating a running a business. Let’s take a look at both sides so you have a better idea of how you want to approach your journey into entrepreneurship and who you want along for the ride.
Why Established Relationships Make for Good Business
There’s a reason why the family business model has lasted for so many generations. Passing on the business from parent to child is a long-standing tradition built on the foundation that the family is able to develop over the years. Of course, when you are first starting in an entrepreneurial pursuit — you may have no choice but family and close friends because of the zero-money-being-made-right-now situation. But here’s why such established relationships make sense for your new start-up:
Trust is Already Established
Finding a business partner you can trust can be quite the challenge. First off, where do you even go looking for a business partner outside of your inner circle? Next, how do you establish trust as you move forward in a joint endeavor where you’re both financially committed?
When you work with friends and family, trust is already established from a lifetime of experiences. You’ll be able to put together a group more quickly and start developing a business model right away. You won’t have to read over resumes or do a background check on anyone either.
Sharing a Vision is Easier
Family members and lifelong friends share a lot of similarities. That’s what often draws people together, or is the byproduct of spending a lot of time together over the years. Since you’re so in sync, it should be easy to share the vision your start-up company is built upon.
When trying to pitch your business idea to an acquaintance or even a stranger, they might not take to it as readily. You might have opposing interests and ideals that make it problematic to hone in on a single vision. Thanks to the similarities you share with relationships closer to you, coming up with a joint venture should be relatively easy.
Balancing Schedules Comes More Naturally
Building a business from the ground up will take a significant amount of time and coordination. Everyone will be working around different schedules, especially if the start-up in question is a side project to full-time jobs. Luckily, family members and close friends will already have some experience making conflicted schedules work.
From coordinating dinners and birthday parties to carpool schedules for a variety of after-school activities, making time for a start-up won’t be anything new for busy families. To aid in the process, you can use online calendars to share events and even entire calendars to better coordinate events and meeting times together.
Why Branching Off Might Be Better
While it might sound nice to start a business with your closest friends and family members, there are some serious concerns you should consider before diving in with them. The following will dissect why branching off to other sources of assistance might be a better option for you and your budding business.
Outsiders Provide a Fresh Perspective
Earlier we discuss the hardship that was pitching your ideas to someone who thinks very differently from you. While that might lead to slower progress, it can also be a really good thing. People from outside of your personal circle provide a fresh perspective and unbiased feedback on why your idea might be flawed. If you must go with family find a way to discuss issues candidly.
Your prospective business partner might be of a different demographic or educational background. Combine their thought process with your own and you’ll often come up with a more sound business plan as your strengths cover the weaknesses of the other.
Accountability is Ensured
Close friends and family will often choose to be supportive over being critical, which isn’t always a good thing. While you definitely need the support, you also need someone to keep you in check. Someone needs to hold you accountable for your goals and the promises you make concerning such a large project.
When a family works together, the casual atmosphere can sometimes get complacent. When an outsider becomes your business partner, they have their own ambitions and family commitments to worry about as well. They won’t be afraid to push you forward when they feel like you’re not holding up your end of the deal.
Stressful Times Won’t Affect Personal Lives as Much
Running a business can get incredibly stressful. That stress can carry into your family life if you’re not good at compartmentalizing, which in turn, will impact your relationships. The stress can become compounded when you’re working with family and stressful situations directly cause tension between members.
When two people work together from different families or spheres, they can walk away from a stressful situation to reset their minds. Separate backgrounds and families help individuals more easily separate their work from their personal lives.
While it can be profitable to have a family business, but you will want to have the discussion about whether you will make the business a priority in a tight spot — or the relationship. Can you make the business a priority and not damage the relationship? Do you have the ability to put the business first? Does your relationship have to take priority over everything else? These are critical points to cover before becoming partners.
No matter which side you choose, the support you get can make or break your business. Give your support a lot of thought before making any commitments. You’re making your new business to be for the long haul. You’ll want to consider your needs and wants as you begin your entrepreneurial journey and be sure to reassess needs along your path before making a permanent solution.
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