Friends and family

Better the devil you know?

Setting up in business with family or friends.

Going into business with family or friends can be an amazing way to blend your work and home life, spend lots of time with the people you love, and work with people who share your values and ideals. Starting up with family or friends is also cheap. You are all likely to put in way more hours for your pennies than an employee would, and your emotional commitment to the business means that you will pour your heart and soul into it.

Going into business with your nearest and dearest is, however, a gamble. You can win big, and end up with an amazing life, but you also have a lot to lose. Families and friendships have crumbled in the face of a business that sucks out the positive aspects of a relationship, leaving the sniping, griping negative side. At the heart of the danger is the fact that you are moving your relationship into unchartered territory, and cracks can quickly begin to show.

“What are you doing? Nice college boy. Doesn't wanna get mixed up in the family business. You think this is a battle field where you shoot someone a mile away? No, you get a 45' shoot them up close and bada bing blood all over your nice ivy league suit. You're taking this awfully personal… this is business and this kid's taking this very personal.” The Godfather (1972)

Some of the risks that you run are:

The assumption that you share a happy shiny vision of your new business and your new life, when in fact you might scratch the surface and find that there are major differences in the way you see your business develop, run and balance with the rest of your life. Check out our ‘friends and family face-off’ exercise to start to find out how compatible you really are.
You might find it difficult to be honest with each other, or might find it all too easy to be too honest. You need to find a balance where you can be frank and direct without hurting anyone’s feelings.
Despite some advice that is bandied about, you are going to find it nigh on impossible to separate your personal and business relationships, and to try to do so probably goes against your reasons for working together anyway. Talk honestly about how you are going to navigate these different relationships, and respect the way you each operate in the working world.
It is easy to be unrealistic in your assessment of your own skills, and those of family and friends. Talk honestly about your perceived strengths and weaknesses and how you can put them to best use. Don’t make assumptions about what your partners will bring to the business based on their experience. For example, don’t assume your brother is going to be happy spending weeks building an amazing company website if he is leaving a web design career because he hates it.
If you are going to be hiring employees, especially at a senior level, they are going to find it difficult to work around your existing relationship. Maintaining good relationships with other staff and employees depends on you remaining scrupulously fair. Make sure everyone is aware and involved in important decisions, as opposed to presenting a fait accompli based on decisions you have made round the dinner table. It is important that you can be trusted, so make sure that you keep your counsel – don’t wash your business partner’s dirty linen in public and, equally, make sure that your staff know they can approach you in private if necessary.

Most of these risks can be avoided by being proactive and planning in advance. Try to keep to these golden rules for working with your loved ones:

Make sure you are going into the business with your eyes open. Take our ‘friends and family face-off’ questionnaire to find out whether you are as compatible as you think.
Be honest with each other. If something is bugging you, talk about it straight away, don’t just hope the problem fades away. Talk through decisions and don’t spring any surprises on each other.
Remember why you are doing this. You like each other, and want to spend time together, so enjoy it. If there aren’t aspects of the business that you love doing, you need to make some changes.

Download our 'Friends and family face-off' questionnaire here, to find out how compatible you really are.

Download this article as a PDF here.