Many success businesses have been built upon parents, children, siblings and cousins pooling their monetary and talents together.
The first seeming advantage to starting a family-run business is for monetary reasons. Trust among family members allows a comfort zone when contributing funds to the business. Family members often think that another member will not take advantage of them or “run with the money.”
On the other hand, disagreements about how money should be spent or paid to each family member, is often the cause of family-run business to fail.
In addition, a family that is comprised of many talented people often sees the advantage of having a “ready-made staff” on hand to jump right in and start doing their jobs.
If family members do not have a clear understanding of their assigned roles in the business, misunderstandings can often ensue, creating an environment of power-struggles and tension. These feelings can overlap into family social gatherings and holiday events.
A family-owned and operated business is often successful and can provide job security and fun as long as money and talents have been fully discussed. Potential problems that could arise and cause friction should be addressed during the business development phase---not after.
