Have you always wanted to run a company with your kin? The United States is home to 5.5 million family-owned businesses, employing approximately 2/3 of the nation’s workforce.
Many people like the idea of operating a business with relatives. However, it does come with certain challenges. Read the advantages and disadvantages of owning a business with family members.
Pros of a family business
Collaborating with relatives in running a business has its upsides:
-Family businesses tend to last for a long time: The average American family business lasts about 25 years. In addition, 40, 13 and 3 percent of family businesses are passed down to the second, third and fourth generations respectively.
-You don’t have to deal with a long, difficult hiring process: When you need employees for your business, you have to post help wanted ads, conduct interviews and run background checks. All of that work could take weeks. The hiring process is typically quick and simple in a family-run company because you know your family member(s)’ work ethic and personality.
Cons of a family business
Family businesses have their flaws, too:
-It might be difficult to separate home duties from work duties: Family members do not get along all the time, and when that happens, personal disputes could spill over into work and influence customers to take their business elsewhere.
-Some family members do not stick around to continue the family business: You might have adult children or other relatives who want to move on to other endeavors. You’re happy for them but worry about your company’s future.
Owning a business with relatives can be advantageous and risky at the same time. If you’re uncertain if a family business is right for you, it helps to seek experienced legal assistance.