Around 60 percent of Americans are employed by a family business. If they’re built right, they can support a family for generations.
Are you thinking about starting your own family business? Are you confused about how to get started?
Let’s go through how to start a family business.
Have a Solid Business Plan
The first thing you’ll need is a solid plan for your new business. You’ll need to know what you’re hoping to achieve, and how your business will generate revenue.
In a family business, it’s particularly important to define everyone’s role and stakes in the business. Things can go ugly very quickly if someone wants more money when things are successful.
Your family business should also reflect your family’s strengths and weaknesses. If none of you are any good at math, you probably don’t want to start an accounting firm – and, you should outsource your bookkeeping to someone more qualified. You don’t want to run into any problems once tax season hits, after all.
The structure of your business should also be discussed with your family. If you start a sole proprietorship, for example, the business will technically be run by just one person. That can put a lot of pressure on that person, and it may make other family members less inclined to participate.
Ideally, you should go through your plan with an independent business advisor and/or accountant to ensure your plan is fair and benefits everyone.
Get the Money Together
To actually start a business, you’ll need money to get off the ground. You may have some seed money to get you started. You may find investors who can help you contribute.
Ideally, multiple members of your family will be investing in your business – if you’re financially invested in a business, you tend to be more personally invested in that business as well. That way, everyone will be more committed to your future success.
But, you can also use your business plan to help you get loans. You should discover small business loans for your needs. Just make sure you have a plan in place to repay your loan – you don’t want to end up in a lot of debt.
Keep Your Personal Life Separate
While there’s always going to be some mix of business and personal when you’re running a family business, it’s important to have as much separation as possible.
You can’t penalize one of your loved ones working for you because you’re upset with them – work consequences or rewards always have to be separate.
How to Start a Family Business: Start Today
Now that you know how to start a family business, there’s no time like the present. Start putting your plan together, and you’ll have a successful business running in no time at all.
Do you need more advice to help you get your business started? Read some of our other articles on finances, marketing, and much more.