Choosing to start a Small Family Business is feasible alternative to starting a small business on your own, and it is easy to understand why many people choose to do it. For one, you will already know your business partners, which means, trust is a given. This will provide your small family business with more stability than a non-family business, and there is usually more flexibility with job roles. This makes the idea of running a small family business an attractive option for many.
If you find yourself tempted by the opportunity to work alongside your family, you will need to get to know the nature of a small family business before you begin. That is why this week we have put together a brief guide on how to get your small family business up and running, so that you can decide if this is the best path for you to go down.
The Main Aspects of a Small Family Business
A small family business is typically defined as a business that is run or owned by the members of one family. Many will take this to mean that the majority of family members are involved in the business in one way or another, but this is not necessarily the case. You are still classed as a small family business as long as there two or more member of the family who own or run the business.
The Structure of a Small Family Business
Although you will be working with those who you are rather close to, it is important that you both maintain a stable business structure in order to avoid facing any problems over the years. There is nothing that can restrict the structure of a small family business, therefore you can take your pick from any of the existing structures. These include:
- Sole Trader
- Private limited company
- Public limited company
- Guarantee company (non-profit)
There are many factors to consider that could affect your choice of these existing structures. These may include the number of people involved in your small family business, the reporting structure and how profit-driven you are as a small family business.
Before you make any serious commitments, it would be a good idea to sit down with a professional business accountant who can advise you on what would work best for your small family business on a personal and financial aspect.
Getting Started as a Small Family Business
Before you jump in, there are some things that must be considered for your small family business. These include the following:
- Your partners – Who do you want running your small family business with you? Regardless of whether they are family or not, it is extremely important that you go into business with someone who has the necessary skills in order to give yourself the best chance of success.
- Business values – This is something that requires serious thought. Your business values may differ from your family values, so it is important to have these values specified before you get started with your small family business.
- Finances – Before you get started on your small family business, it is important to discuss any salaries, remuneration and other benefits early on if you wish to avoid any conflicts further down the line.
- Dealing with Conflicts – When running a small family business, it is likely that you are going to argue every now and then. If these conflicts go one step too far, it is important that you have a plan in place so that you can resolve them as smoothly and efficiently as possible.
Following these steps will certainly help you get your small family business up and running a lot more smoothly, but it is still important to have guidance along the way. By hiring an expert accountant to ensure that your small family business succeeds financially, you will have less financial worries while on your business venture. Get in touch with Steven Glicher today to see how we can get your small family business off the ground with a sound financial plan.