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Do family members make good business partners?

On Behalf of | Mar 17, 2022 | Business Formation & Planning |

If your business has managed to grow exponentially, then this is obviously a positive thing. However, if it has been a sole operation, you may find continuing to expand a little overwhelming. 

At this point, you might consider restructuring your company. One way you can do this is to enlist a business partner. So, who is the best person for the job? Sadly, there are no definitive right or wrong answers to this. Every business is different and so too are the relationships between individuals. 

However, there are some factors you may want to consider before approaching a family member about entering a business partnership. 

What do they bring to the table? 

If you are considering bringing someone into your business, then it goes without saying that you trust them. But is this enough? Having someone trustworthy by your side is certainly a positive, but do they bring valuable business skills and relevant expertise to your company? It is often best to try and separate personal motives and business-related motives. Enlisting someone without the relevant knowledge and skills is unlikely to nurture your company’s continued growth. 

What happens if you fail? 

While there is every chance that your business will prosper under the right management, there are always certain levels of risk. If your business does not work out this time, you will have a chance to start afresh and rebuild. Can the same be said for your relationship with your family member? Legal disputes in business can take their toll emotionally, and you have to think about whether the risk of sacrificing a close relationship is one that you are willing to take. 

Going into business with the right partner can see you achieve all of your commercial goals. If you do find yourself in a partnership dispute, be sure to seek out the relevant legal guidance.

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