As someone whose first business was with a family member (my mother), I’ve learned a bit about starting a business venture with family.
Here are my do’s and don’ts:
- DO the paperwork. With family members it’s easy to go with a verbal agreement to start the business – especially if it’s your spouse. But it’s important to create a partnership agreement and document ownership percentages, rules for buyout and how the business would continue should one family member want to leave the business.
- DON’T cloud issues in secrecy. Nondisclosure to your partner or family is even more unprofessional than non-disclosure to your business associates. Be clear, open and honest with them. You’re messing with their future too.
- DO daily ‘check ins’ with your partner or family. In a start-up so much happens in a day. Check in for 5 minutes every morning or night with an update of the day and the progress of key issues you are dealing with. You’ll be surprised how this takes the pressure off the relationship.
- DON’T assign roles/responsibilities based on family history. Take time to scrutinize each person’s natural abilities and talents when assigning roles.
- DO a communication plan. Establish times of the day, week and month where you will take time to ensure everyone is up to speed. This could be a mix of your daily check-ins, a weekly family board meeting, a date night with your partner, and maybe a commitment to take a weekend off.
- DON’T underestimate the journey. It will ALWAYS take longer, cost more, be more of a risk, and be much harder than you think. Announce that to your partner or family before the journey starts and there won’t be any surprises during the journey.
About Troy Hazard: I am the founder/owner of 12 businesses over the last 25 years, current CEO of Troy Hazard International, author of the book Future-Proofing Your Business, and the former Global President of the Entrepreneurs’ Organization. I have been a franchisee twice and a franchisor while consulting with over 300 brands in 6 countries. You can find me on Twitter @TroyHazard. You can book me to speak at your event by contacting us or calling 214-536-6666.