Starting a Colorado business with a family member may seem like the perfect scenario. You may decide to split ownership 50/50 for fairness. This seems like a solid plan. You are equals and in this thing together. However, family and business do not always mix well and could spell trouble for your future.
Forbes explains that when you start a business with a family member, you may mistakenly feel you can efficiently work through any issue that comes up, which makes the partnership ideal. Having this outlook often means you do not prepare for conflicts that do happen. You are not being realistic about the demands of running a business and how that may affect your relationship.
The emotional side
Anyone who starts a business is passionate about what they do. You are probably no exception, and neither is your family member. This passion is wonderful when it comes to fighting for the business and making it a success, but it is a recipe for disaster when it comes to working with your family members.
When something goes wrong, the passion may turn into anger. Adding to this is the history you have with your business partner. There are sure to be things in the past that bring up a lot of emotions. Those emotions mixed with the passion you have for the business may ignite and lead to serious arguments. If you did not prepare well enough for how to handle disputes, this may spell trouble for your business.
If you have your heart set on starting a business with a relative, then you need to approach it as you would if you were working with someone not related to you. Create a partnership agreement. Plan for issues and conflicts. Decide on a resolution process. Make sure you set rules and guidelines for running the business.
Having an agreement can take the emotions out of a disagreement. It allows you to focus on the business and problem at hand, which is often ideal for the situation in the end.