Should You Start A Business With Family Members? Part Five

If you DO choose
to partner with family members,
I strongly advise
that you do everything you can
to limit your liability
and to limit the liability
of those family members,
whether they want that
or not.

And if this is their first start up,
they likely won’t want that.
They’ll see the costs
of limiting their liability
as a ‘waste.’

It isn’t a waste.
It is protecting ourselves
and our loved ones
and valuing
our relationships
with our business partners.

And if we don’t have
the money
to do that,
we likely don’t have the money
to successfully start
a business.

In my part of the world,
the best way to limit liability
is to form a corporation.

In your part of the world,
it might be insurance.
Or it might be a different structure.

Investigate this.
Do it.
Limit your liability.

Should You Start A Business With Family Members? Part Four

A family member wants
to be your business partner.

They aren’t qualified.
Or there is some other reason
you don’t want to partner with them.

But you also don’t want to
damage your relationship with them.

How do you turn their offer down
without doing that?

I usually answer with
“Oh, I could never
put you at risk like that.
I love you too much.”

I stress how risky
starting a new business is,
how much they could lose,
how badly that failure
could mess up their current life.

If they’re still not dissuaded,
I put them to work.

I work them hard.

I call them late at night
and early in the morning.

I work them on weekends.

I give them a taste
of the entrepreneurial life.

If THAT doesn’t do it,
well…that has never happened
but if it did,
I would likely rethink
not partnering with them.

There are ways
to turn family members down
tactfully.
Employ one of those ways.

Should You Start A Business With Family Members? Part Three

There are a gazillion great reasons
why you should partner
with someone
to start a business.

The worst reason
is
because they’ll feel sad or hurt
if you don’t partner
with them.

This is even more true
if you’re considering
a family member
as your business partner.

Because when you choose them
as a business partner,
other members of your family
will be extremely hurt
that you didn’t choose THEM.

If you have a large family,
that means
you’ll upset more people
by choosing that family member
as a business partner
than if you would please
(initially)
by choosing that family member.

Don’t partner with someone
to make them happy.

Should You Start A Business With Family Members? Part Two

Yesterday, I started
this mini series
on whether or not
we should start businesses
with family members
with a post on failure.

There are two big reasons
I started with failure
and that’s because
1) Most businesses fail.
If we don’t plan for that possibility,
we’re not being realistic.
and
2) Businesses started with family members
are MORE likely to fail.

Why?

Because family members are unlikely
to be
the best people to partner with.

To put it bluntly,
they’re not qualified
for a partnership role.

They are unlikely
to have experience
in the industry.

F*ck.
They are unlikely
to have
ANY relevant experience.

They are unlikely
to have connections
in that industry.

They are unlikely
to follow our suggestions.

They are unlikely
to be anyone
we would hire
if they were strangers.

If you wouldn’t partner
with a family member
if they were a complete stranger,
think long and hard
before partnering with them
at all.

Should You Start A Business With Family Members? Part One

You tell a family member
about an exciting new business idea
you have.

The family member
tells you
“Let’s do this.
I’ll partner with you.”

It is tempting
to say yes
but think it through.
Thoroughly.

Because most businesses
fail.
That’s reality.

And a business that fails
destroys relationships.
Forever.

That means
you won’t
have a healthy relationship
with that family member
ever again.

You won’t speak at get-togethers.

They will bad mouth you
to other family members.

It will impact
every person in your family.

And you,
because you had the idea,
will likely be painted
as the bad guy.

Are you willing to risk that?

It also means
those family members
won’t be able to help you
if you need money
to put food
on the table.

They’ll be
in the same situation,
competing for that help.

And remember
they will point at you
as being the cause of their hardships.

Think about
the consequences
of starting a business
with family.