The Pros and Cons of Starting a Business With Family Members. Most entrepreneurs start their businesses with family members in mind. Aside from the financial support they would like to provide. They also want to help family members by making them part of the business.
However, it may not always be a good idea to include your family members in your business. Before starting or joining a family business, it’s important to consider the pros and cons.
There are rich rewards to creating a family business or working for a family business, but there are also serious risks. This article will discuss some pros and cons of starting a business with family members.
More inspired to work hard. One of the potential benefits of running a business with family members is that your family members may work harder than a typical employee. They may even work harder than they did at their previous jobs because they are deeply invested in the business. They want to be seen as equal contributors to the business. And their effort could help ensure the success of the business.
More comfortable working together. When you are working with family members, your co-workers are more than just peers or business partners. They are friends you can count on and family members who genuinely care for you. With this in mind, the business relationships with family members are likely to be much more empathetic.
More long-term outlook. When you do business with non-family members, they often have a long-term plan that may not include your business. However, when you deal with family members in your business. They often think years or even decades ahead of staying with you.
A longer-term perspective is a good way to foster a culture of a clear strategy and decision-making throughout the business.
The conflict between family members. The dynamic between family members working together in a business can cause conflict since there will always be a blurred boundary between family life and work life.
They can be a source of difficulty when it comes to issues on succession, sibling relationships, and identity development. Succession is one of the most difficult challenges that family businesses face and can become a challenge when the older generation does not permit the younger generation the needed room to learn, develop, and grow.
Unclear and unfair business practices. One example is having a little-to-no system of meritocracy in place. Family-owned businesses tend to have a reputation where the succession of the business is all but guaranteed to the next family member in line.
This can deter talented candidates and employees who otherwise would be motivated to excel and move up within the organization. Moreover, unqualified family members can become leaders, which results in mediocre business decisions and performance.
Unfair practices with other non-family member employees. Leaders who are not family members may encounter a reluctance in making important decisions that negatively impact a family member. If a family member who’s an employee isn’t delivering on promises made, it will be a tough conversation when it comes down to addressing a potential change in position for that person.
Bottom line, as a business owner it will be up to you whether you decide to let family members get involved in your business or not. No matter what your decision will be, there will be pros and cons. Your job now is to make sure that your decision will be a balance of both.
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If you’re interested, you can inquire by calling (+61) 2 9533 2211 or email [email protected] and our customer representatives will be standing by to assist you.