Going into business with family is something many people try to avoid at all costs. The primary driver of this hesitation is the fear that feelings will get in the way of making shrewd and necessary business decisions.
While the reason behind the reluctance is valid in a lot of cases, for me, launching my social media agency with my brother was the best decision I could’ve made. Not only have I loved building a company with my brother for personal reasons (who wouldn’t want to hang out with their friend all day?), but it’s provided our company with benefits in business as well. Just one example is that I get told all the time from readers, clients, contacts and more that my brother and I being co-founders naturally caused them to trust our company based on our family values.
Yet, before you decide whether or not going into business with a family member is right for you, here are some pros and cons to consider.
1. You know each other best.
If you like your family member enough to go into business with them, chances are high the two of you already have strong chemistry. You both know the kind of people you are and aren’t afraid to speak up when you disagree on important decisions.
The same can’t always be said for potential hires and partners who aren’t family. During the interview process, candidates will often give you the version of themselves they believe you want to see as opposed to who they truly are. A candidate who you thought was going to take your business to the next level could turn out to be a complete dud, or vice versa.
To be clear, you shouldn’t settle for hiring family members just because you know them better, but if they’re a top talent in their field and you have a choice between them and a stranger off of Indeed or Ziprecruiter, I’d pick the former 9 times out of 10.
2. Immediately being perceived as trustworthy.
Trust is the currency of quality business relationships. The companies who are able to attain it and keep it will inevitably win, whether that takes 10 months or 10 years. As mentioned above, by going into business with family members, it’s only natural for you to automatically be perceived as a family-first, trustworthy individual.
3. The chances of you getting cheated out of money are (hopefully) less.
There certainly are brothers, sisters, parents and cousins who have stolen from their family and high-tailed it across state lines never to be seen again. After knowing them your entire life, if you trust them enough to launch a business with them, then it’s unlikely they’ll suddenly change personalities the second they put their name on a legal document with you.
1. Groupthink is likely to arise.
Not everything about going into business with family is butterflies and roses. One of the primary cons is that “groupthink” (defined, a consensus of opinion without critical reasoning) tends to take place. This comes to little surprise given the two of you most likely grew up in the same home, so having similar values and ways of thinking is inevitable. This is why it’s crucial to add new members to your team as soon as you can afford to do so. Not only will they help scale your business, but they’ll provide different worldviews and perspectives as well.
2. Feelings are bound to get involved.
When it comes to anything related to family, feelings could certainly get in the way of rationality. For instance, imagine if your business eventually outgrows your sibling’s role but not yours? It’d be tough to think of a more awkward situation than being forced to fire your sibling. To avoid this, establish distinct roles for you two from the very beginning. Set boundaries and communicate with each other about every aspect of the business, even the uncomfortable parts like money. As with any relationship, communication is key.
3. Other team members may feel like you’re playing favorites.
As an entrepreneur, it’s important to ensure every member of your team is engaged, feels appreciated and knows they’re a valuable asset to your company. If you go into business with a member of your family, be sure all your other team members don’t feel left out. If you don’t, then it’s easy for them to feel isolated and on the outside of an inside joke.
Going into business with members of your family is a decision you should critically evaluate prior to diving into. For many, it has resulted in devastating financial and familial loss. For others, like myself, it’s the best decision they have made. Take some time to weigh the pros and cons before carefully before committing. Best of luck.