More and more people become individual entrepreneurs these days. However, a large number of businesses are also based on partnerships. When a company is run by two or more people, their skills, experience, and financial capital are combined. And this leads to many benefits.
Many aspiring entrepreneurs start looking for business partners among those who are close to them, including siblings. At first glance, a joint business with brothers and sisters will surely be successful, but there are pitfalls, of course. Let’s figure them out together: in this article, we have collected the pros and cons of such a decision.
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Advantages
Support
One of the main reasons why people decide to start a business with siblings is their loyalty. You can trust them, and they won’t let you down; sounds great, doesn’t it? Relying on strangers can be difficult, especially at the very beginning.
You Already Know Each Other
Since you have known each other for a long time, it is easier to find a common language with a sibling than with someone new. Plus, you’ll save time as you don’t have to get used to a stranger. Therefore, you can immediately start working on the main thing – your business.
Perspectives
It is very likely that if you and your siblings manage to launch a prosperous family business, you will later involve your children in it. Together you might build a business empire.
Money
Of course, you can look for an investor or get a loan from a bank, but taking money from siblings is much simpler. Also, sharing risks together is better than trying to solve all the problems yourself as all your expenses are split into two.
Moreover, if, due to some circumstances, a young entrepreneur cannot return the money borrowed, most likely, siblings can wait a little longer for the debt to be repaid. In addition, such loans most often have no value, and you don’t have to pay interest on them.
No Formalities
Hired employees definitely need an official contract, specific job responsibilities, benefits, etc. At the same time, working with relatives makes the situation less complicated.
Shared Values
If siblings grew up together and have the same upbringing, most likely, they have the same values. When your brother or sister is your business partner, you will probably make important decisions together and overcome obstacles that may come your way.
Everyone Has Their Own Strengths
Imagine a business owned by siblings: let’s say one of them is active and sociable, and the other is reserved and hardworking. Their skills can go well together. For example, if one is a great marketer and the other is a talented developer, then their partnership would be the perfect combination.
Disadvantages
Damaged Relationships
When conflict situations arise in business, they quickly become part of personal difficulties, of course. Therefore, family relations can become worse.
Different Goals
Everyone has their own motivation when it comes to business. Thus, one may think strategically and aim at building a strong brand, while the other may worry about personal income only. A fruitful partnership is possible only on the basis of a common goal, as well as shared values and aspirations.
Family Ties Don’t Guarantee Business Compatibility
Of course, we all want to believe that warm family relationships will once grow into a powerful business union. But often, people have completely different visions of how to accomplish tasks. Thus, the first conflicts may arise at the stage of thinking through a business plan or corporate culture, for instance.
Who Is a Real Boss?
When it comes to relations between siblings, there is no specific hierarchy, especially when both of them are adults. The same cannot be said for business partnerships, as having a leader is an integral part here. Misunderstandings, aggression, accusations – this is how the worst scenario looks like. Unfortunately, the struggle for power between partners will affect all aspects of the company’s development.
Success Can Be Risky Too
There is a possibility that the relationships could change even when the company will be turning profits. Why? You’ll have to share the earnings – in such situations, we often get to know the negative side of our loved ones.
Difficulties in Organizing a Vacation
When you start a business, the workload is huge. Planning a vacation or weekend getaway becomes a daunting task, as you and your sibling can’t go anywhere together without leaving someone in charge. So, if you don’t have a reliable employee to handle business in your absence, then it’s time to think about finding such a person.
Assessing Performance Becomes Harder
Lots of things can go wrong when employees perform their duties poorly, and it’s not easy to criticize them when they are your siblings. Thus, you need to carefully select words and expressions if you don’t want to offend a brother or sister.
Emotions vs. Analytical Thinking
When we are guided by our affection, not rational thinking, we risk a lot. For example, your partner may lack the competencies and experience, and it will be tough for you to assess each other’s performance adequately.
To Sum It Up
Struggles with finding a job and massive layoffs make us consider launching a business. But even if you don’t have the start-up capital for building it, don’t abandon this idea. One of the most popular options is to ask your loved ones for help.
Many people claim that maintaining strong family ties and managing your business together is not the same thing. Despite the best intentions of the partners, a joint venture can turn into something close to a nightmare. Luckily, there’s a way out – just carefully analyze the pros and cons in advance. And we hope that our article will help you make the right decision.