Four Things to Think About Before Going Into Business With Family
Many people go into business with their family members. In fact, according to data cited by the Family Firm Institute (FFI), approximately 50 percent of all U.S. companies are family businesses.
On the one hand, running a family business is not much different than is running any other type business. The same basic rules apply.
On the other hand, going into business with a family member presents some unique challenges. If things go wrong, the damage can spread to other parts of your life. Before you jump into business with a family member, you need to be sure that you are properly prepared for what is ahead of you. To help you get started, our experienced West Palm Beach business law attorneys have put together a list of four important things that you need to consider prior to starting a family business in South Florida.
- You Need to Be Able to Work Together Without Damaging Your Personal Relationship
You should not go into business with a family member unless you are confident that you can work with them without damaging your personal relationship. Far too many family businesses end up leading to highly destructive intra-family conflict. This will hurt both your business and your family. Teaming up with a family member may sound great on paper, but you need be sure that you are working with a family member who you trust as a business partner.
- Family Businesses Should Always Operate With Formalized Agreements
One of the biggest mistakes that people make is assuming that they can go into business with a family member, without actually getting a formalized agreement. If you do this, you are risking a nasty dispute. Do not treat the business any differently just because you are working with a family member: get everything in writing.
- There Needs to Be a Clear Structure for Decision Making
While you may think that you and your family member(s) can simply get together to talk out important business decisions, the reality is usually far different. There should also be a clear decision making and dispute resolution structure in your company’s operating agreement. This will ensure that important decisions will get made in an efficient manner, reducing the risk of serious disputes.
- All Parties Must Be Ready to Put the Business First
Finally, you cannot give your family members a ‘break’ simply because of your personal relationship. To build a successful company, the business needs to come first. You should only work with a business partner who is responsible and who can put personal relationships aside in order to work hard for the best interests of the company.
Contact Our South Florida Business Law Attorneys Today
At Pike & Lustig, LLP, our Florida business law lawyers have extensive experience representing family businesses. To find out more about what our legal team can do for you, please do not hesitate to contact us today for a free legal consultation. With offices in Miami and West Palm Beach, we serve family businesses throughout the region, including in Pembroke Pines, Miami Gardens, and Hialeah.