Should I Start A Business With A Close Friend or Sibling?

by | Jul 19, 2021 | Entrepreneurship, Life Lessons, Lifestyle, Relationships | 0 comments

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Should I Start A Business With A Close Friend or Sibling?

You’re in a tough spot right now.

You and a close friend or sibling have agreed on a business idea, but you’re worried if it’s too close to home to pursue

In these times, when it is difficult to find a reliable and trustworthy business partner, many people believe that choosing a close friend or a sibling as a business partner might be their best option.

But consider that a neutral partner would avoid any type of dispute with a close friend or a sibling, if things don’t work out.

Starting a business with someone close to you has a high risk/reward.

Starting a business with someone you’ve known for a long time has many advantages, but also has an equal number, if not more, drawbacks.

Everyone knows the story of Mark Zuckerberg and Facebook. Zuckerberg stole the idea from his college friends, and they obviously don’t talk anymore.

But what do you think, is starting a business with your sibling or close friend will affect your personal life?

Make Sure You’re Both Motivated

I tried to start an Amazon FBA business with two of my brothers, after I had a lot of success a couple years ago.

What I quickly learned was that I had a lot more motivation and interest than my 2 brothers – who just looked to me to do all of the work.

Make sure that you’re partner is incredibly motivated – as this is a personality trait that’s absolutely necessar to be a successful entrepreneur. This is non-negotiable.

If you’re struggling with motivation, consider signing up for our daily motivational quote text message.

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I’ve seen good ideas flop because the team behind it was lazy.

Don’t let this happen to you.

The Advantages

Let’s have a closer look at some advantages of starting a business with a close friend or sibling.

Trust, is the biggest factor here.

You know that your close friend or sibling isn’t going to run off with your idea, money or business plan.

You don’t have to spend any time getting to know them, you’ve been doing that for years!

If you meet someone at a networking event or even someone online, there’s a good chance that your working styles and communication won’t pan out and work well together.

One of the greatest advantages of starting a business with a close friend or sibling is they are willing to take on several different roles and distribute the workload simultaneously to make sure the company or business succeeds.

You know what someone close to you can handle.

Family members are willing to contribute their own financial resources while starting a new startup or a business venture so when there are financial difficulties, close friends or family members will bring more resources and different ideas to the table.

It’s probably a little easier to discuss topics related to money with someone you already know.

Owning a successful family business will also help your next generation.

Say you and your partner hit it big, but you’re also in the same family as them.

How amazing would it be to create a legacy for future generations?

A family business can include the next generation of members in the business developing leadership and qualities like work ethics, increasing their knowledge, and providing a competitive edge over other non-family firms.

The Disadvantages

Problems like family conflicts and undefined leadership in business have ruined many startups.

Sometimes when you’re just too close – it ends up being a bad thing.

When different people of the same family own a business, the command or leadership is undefined most of the time, and it is often ruined when there is more than one decision-maker.

Say the worst case scenario happens. 

The business goes belly up and your partner ends up blaming you. But they’re also your brother, sister or best friend.

Do you want the next 20 years of family Christmases to be awkard or have someone not attend because they have blamed you for something?

When things hit close to home, they can impact not just yourself, but your entire family. 

Whoever you decide to go into business with, you need a clear heirarchy of leadership and a written agreement between the 2 of you.

Never go into business with someone without the terms being documented and a contract drafted up.

Don’t do a “napkin agreement” or “verbal agreement” – these don’t stand up in court. if things end up going poorly.

Get it all down in writing and signed.

Moreover, a business with a close friend or a sibling can be distracting as it can also bring business conflicts to the home, which can affect your personal relationships as well.

Furthermore, such a person with a close relationship might break the rules,  whether they’re doing it subconsciously or simply taking advantage of the fact that they are family, it’s a dangerous practice to tolerate in the delicate early days of a new startup.

We’ve seen this happen numerous times.

Final Thoughts To Consider

It’s obvious that a business with a close friend or sibling has are a delicate balance between risks and rewards.

Only you can decide if you should start a business with someone super close to you.

Just make sure to weight out the pros and cons, BEFORE you start the business.

This is not a decision to take lightly.

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