How to start a family business

You're fed up with working for some soulless corporation and want to set up a business, but aren't sure about getting into bed with a group of strangers. So why not team up with members of your own family?

by Alexander Garrett
Image: Patrick Regout
Image: Patrick Regout

Pick your partners carefully. Going into business with your siblings, cousins, parents or children isn't a good idea just for its own sake. 'Ideally, you want parties with complementary skills who'll get past the start-up phase,' says Juliette Johnson, head of UK family business at Coutts. 'But you also want to have a good relationship - or why do it?'

Think values. The common agenda when starting out is usually the reputation of the family in their community, says Ajay Bhalla, professor of global innovation management at Cass Business School. 'It is a long-term investment and the people you recruit need to represent your values.'

Don't bet the farm. 'In an ordinary business, you may offer security such as your own capital to secure funding,' says Bhalla. 'But family businesses need to be more risk averse. I've seen some where there's one entrepreneur and the rest of the family contributes. When it fails, everybody pays.'

Sign in to continue

Sign in

Trouble signing in?

Reset password: Click here

Email: mtsupport@haymarket.com

Call: 020 8267 8121

Register

FREE

  • Up to 4 free articles a month
  • Free email bulletins

Register Now

Become a subscriber

From £66 a quarter

  • Full access to managementtoday.co.uk
  • Exclusive event discounts
  • Management Today's print magazine
  • Plus lots more, including our State of the Industry Report.

Choose a Package