Would it be wise to pursue a business opportunity with my family?

| Mar 9, 2021 | Business Disputes |

Starting a business together can seem like a fantastic way to build a dream with someone close to you. There’s an established relationship. You’re familiar with each other’s strengths and weaknesses. And there’s probably nobody you’d rather see succeed than a loved one.

The reality of a family business, unfortunately, is that things often take a negative turn. Conflict from your formative years could morph into organizational conflict, for example. Meanwhile, lifelong roles within your family unit may prove prohibitive when trying to implement education and skillsets.

Considering the amount of work, money and time invested in entrepreneurship, conflict is typical. However, there may be some ways to mitigate contention when working with relatives.

Three considerations for minimizing conflict in a family-run business

Unless you have various hesitations about working with loved ones, partnering together may be an incredible way to build a legacy. Instead of questioning whether doing so would be the right choice, you might rather consider how to maintain personal relationships amid the challenges running a company will inevitably present.

For example:

  • Are you in agreement about your purpose? At various stages of your business life cycle, you might wonder whether it’s worth it to keep going. However, when everyone involved embraces the chosen concept, as well as the desired result, it may be easier to encourage and hold one another accountable during trying times.
  • Who will take over in the future? While it’s tempting to give things to those you care about, business succession requires tenacity and grit as well as business acumen. Before allowing someone from the next generation to take some control, determine how they must earn their opportunity to lead.
  • Is everything clearly documented? As with any organization, individual roles and responsibilities must be put in writing. Your attorney can counsel you on how to draft legal agreements and advise you on appropriate contracts. For the long-term success of a growing entity and the health of your family, be transparent in checks and balances, job duties and ownership rights from the start.

Keep in mind that no matter how well you get along around the dinner table, bringing a business to fruition can add a significant level of complexity to any relationship. Consider the potential legal ramifications of your formation and possible dissolution. As such, try to allow some separation between home and business.

Personality conflicts, friction and disappointment are bound to occur. However, to a large extent, you get to determine to what extent your success is worth overcoming shared challenges.