While getting any business up and running requires hard work and determination, starting a business with a loved one comes with its own set of challenges.
Many family-owned businesses start as side projects. After dabbling in a hobby or interest, family members decide to take a leap of faith and open their doors to the public. To be successful, family-run companies need structure-both by establishing their business entity and developing a working relationship that incorporates life/work balance.
Form a legal entity.
Don’t let the excitement over your new business distract you from important business and legal matters. Form a formal legal entity, like a corporation or limited liability company (LLC). This helps protect family members and the business from the unexpected.
Put things in writing.
Some entrepreneurs think a quick conversation with a spouse, parent, sibling or child can settle important business matters, but entering into a business partnership with anyone, including a loved one, should never be taken lightly.
Remove room for interpretation by putting everything in writing. Discuss sticky matters upfront, like salary, work schedules, vacation time and job responsibilities. By tackling these uncomfortable conversations early, you’ll reduce the stress and possible resentment that could come later.
The best way to balance your life and work is to separate family and business time. Make it a policy not to talk about work while at the dinner table, at a family gathering or on the weekend.
Keep the lines of communication open. The stress of running a business can put strain on any relationship so learn how your partner handles this stress and find ways to tackle these issues together. Set aside each day or every week to discuss what’s working and what isn’t.
Just like money causes the most arguments in a marriage, the same is true for family-run businesses, so keep personal and business finances separate. Maintain different bank accounts and accounting practices for family and business use.
Maintain your identity.
It’s easy to get consumed by work and your long list of to-dos, but it’s necessary to step away from the office occasionally to clear your head. It’s also important to take part in activities that don’t include your partner. Pick up a hobby. Go to an exercise class. Read a book.
While it’s often necessary to “live your work” to get a new business off the ground, it’s critical for family-owned businesses to find a balance between their personal and professional relationship. Starting a business is hard work. Partners each need to be equally committed to make the venture a success and profitable for the long term.