Operating a business is difficult as it is without the unnecessary complications of relationships getting in the way. Although it is true that having family friends or relatives as business partners has its built-in advantage, the corresponding disadvantages have to be recognized as well to balance expectations. Business success can bring about unity or division in the same way as failure does, so it is best to tread with care in any business venture that directly involves people who are familiar with each other.
When one talks of a family business, what readily comes to mind is the complete solidarity of family members working as business partners or associates. There is tremendous strength in full cooperation if such scenario exists. Family members and friends are expected to always have the best interest of the shared business. Unfortunately however, this is not always the case.
Family businesses are more prone to inner maneuverings to gain control because job descriptions, chain of command, manner of succession, and compensation levels are usually unclear. Problems of this nature are best anticipated and addressed before they actually start becoming one. A written agreement that details everything from ownership, responsibilities, liabilities, compensation, and hierarchy should be executed to ensure that the business starts on the right track.
Family members acting as partners or maintaining employer-employee relations tend to be more relaxed than they would normally be when working with other people who are neither family or close friends. This is not good both for the business and the family member acting as employee since best efforts are not offered. When differences are not settled and are allowed to fester, a full-blown family feud may result. A family business has more chances for success when it is operated within the standards of good business practices.