What can be more empowering and helpful than working with your own family for your home-based business? Everyone chips in to the working capital, you gain more independence from banks, you run your business together with people you have known all your life and everyone has something to gain.
Indeed, many large corporations, such as Wal-Mart, were started by a family and some of them are still run by the founding family. Apparently starting a family home-based business is a win-win situation. Everyone becomes independent financially, you get to spend more time together and you all enjoy the success of your business.
However, not everything is as rosy as it seems. In fact, for each success story there are many other failures, with families torn apart and becoming financially ruined after getting in business together. This article is not meant to discourage you from getting your family involved in your home-based business. Instead, it will attempt to offer you guidance in order to avoid the pitfalls. Here we go then:
Pro: Loyal Team
Probably the highest perk of working with your family is the fact that you can trust them with the joint business fund and with your idea, and you can delegate tasks to them without having doubts and second thoughts. Families stick together and they are always the most trusted go-to source for help – either with work, or with money.
Con: Divided Loyalties
Unless you only involve your first-degree relatives, there are risks of falling out with some of your family members. Uncles and cousins may get into a feud, couples separate and divorce, and there will be an atmosphere of bad blood and mistrust until you decide to take sides in the matter. And, of course, no matter whose side you take, someone will be upset with you. In turn, this will affect the family business negatively.
Pro: Financial Independence
As we stated before, starting a home-based business together with your family will help you gather the necessary start-up and running capital without taking loans or putting your house under mortgage. Everyone participates with as much as they can afford and little by little you create a viable capital for your business from your family’s own resources.
Con: What’s My Share?
Things can get really messy when someone wants to get out of the business and demands their contributing capital and share of profits back. Unless you were very careful to draw a written agreement for the association of the participants, no one will know exactly what is owed back and, no matter how fair and honest you try to be, someone will always feel that they’ve been ripped off.
Pro: Your Best Sounding Board for Ideas
You can always open up in front of your family and share your business ideas, right from the very beginning. You can test ideas for new products, ask for feedback and create a brainstorm at the dinner table. Many innovative business ideas or products were created like this, among family members sharing their ideas without fear of bitter criticism and negativity.
Con: You Become a Business instead of a Family
Spending too much time discussing business will take over your lives little by little. Every family gathering will become a business meeting and those who are not involved in the business will feel left out. This, in time, will create a rift between the business side of the family and the others. And these smoldering conflicts can lead to a big and ugly family feud.
Pro: People Love Family Businesses
We will end this article on a positive note. Family businesses are very appreciated in local communities. They represent a part of the American heritage – the entrepreneurial spirit of the small people who make life better for anyone through their work. If you want one extra reason to involve your family in your home-based business, then this is it: you will gain a lot of goodwill in the community once you advertise your business as a family business.