Staples BizTIPs: Family business needs ground rules

By Small Business Expert, Roger Pierce, BizLaunch

Starting a business with a family member may be a dream come true…or your worst nightmare. Like any business partnership, it’s important to consider all of the issues: 

  • Dissolving or selling the business. Decide now what will happen if one or both partners want out, then hire a lawyer to draft the agreement.

  • Future plans. Work together to create a clear Business Plan to ensure all family partners pursue set goals.

  • Chain of command. Someone should ultimately be in charge of certain business decisions, especially if you hire employees. Figure out who’s doing what to avoid confusion.

  • Separating family from business. Set some boundaries such as “no shop talk at family functions.” Such rules will help preserve your personal and business relationship.

  • Increased financial risk. Whether your team is husband-and-wife, father-and-son or sister-and-brother, you’ll both depend on one business to generate a living. Perhaps one partner should keep outside employment until your new venture can generate two incomes.

  • The next generation. Passing the business torch to children can become messy. Hire a Succession Planning Consultant to work out issues such as purchase price, transferring assets and transitioning day-to-day business management. 

Whatever your business arrangement, remember that “good paper makes good friends” and write it up in a legal partnership agreement.

  Roger Pierce

ROGER PIERCE is passionate about helping entrepreneurs achieve success. Co-founder of Canada’s largest small business training company,, he’s launched eleven small businesses of his own and personally experienced what he calls “the good, the bad and the ugly” sides of entrepreneurship.

BizLaunch advises thousands of Canadian startups through its popular how-to seminars and webinars delivered with partners such as STAPLES.

By Adam

June 04, 2010