Friday, January 7, 2011

Small Business Ownership and Family Do Go Together

Many small business owners decide to help their kids get started in business. Other parents who work full-time jobs hope their children can enjoy the benefits of owning their own business – even if they themselves never could. Either way, helping a family member purchase or start their own business is an admirable goal – but it does come with a few caveats.

Since the major of parents help provide small business financing, typically the process starts with the parent doing some research, finding what they feel is the right opportunity for their child… and then working hard to convince their son or daughter the opportunity will be perfect for them. And the parent may even be right – but that doesn’t mean their child will agree. Most people want to carve their own path, chart their own course, and blaze their own trail. (Did I just inadvertently define what it means to be an American?) While some may happily accept the fruits of your research labor, the average person is a lot more excited when an idea, a project – and especially a business – is their idea.

That’s why many of our business partners recommend letting them go through the process with your son or daughter first; then you can decide whether you should invest your money in the opportunity. After all, while you may be the “bank,” your child will actually run the operation – success or failure rests with their efforts, their skills, and their buy-in.

And don’t forget family dynamics. Running a business together could bring your family closer, but it can also be a source of stress and tension. Take time – ahead of time – to think through potential pitfalls and hurdles, decide how you’ll handle those situations… and above all make sure the family that works together also stays together.

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