Pros and Cons of Starting a Business With Family

Is a family-owned business right for you?

A couple looks at shipments for their small business.

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Starting a new business with your family may sound like an exciting opportunity, and it could be a lucrative venture for you, your partner, your parents, your child, or another family member you partner with. But is it the best option for starting your own business?

Combining your personal and professional lives can be both rewarding and problematic depending on the type of business you own, the members you work with, and how you divide responsibilities and revenue.

Here are the pros and cons you need to consider before starting a business with your family.

Key Takeaways

  • Working with your family can create a supportive environment because you likely already trust the people with whom you work. 
  • A family business can make it difficult to separate work and family life.
  • The whole family depending on a single revenue stream can be dangerous in times of crisis.
  • Take your individual situation into account before starting a family business.

Before Starting a Small Business With Family

In 2017, there were a total of 31.7 million small businesses in the U.S., of which 31% were family-owned and operated, according to the Small Business Administration. And the idea of starting a family business appeals to many entrepreneurs for a wide range of reasons. It’s likely you deeply know and trust the people you’ll be working with, the revenue stays in-house, and there’s a possibility of the business being handed down to future generations. It is a great chance to create a family legacy, but there’s a lot that goes into starting a family business.

There are various challenges you can face as a small family business, from household conflicts spilling into the workplace to being too lenient because it’s family. To break this down in detail, we interviewed various online and brick-and-mortar family businesses in the U.S. to understand the pros and cons of running a business with the people in your family.

Pros and Cons of Starting a Business With Your Family

  • You trust your business partners

  • You understand each other’s strengths and weaknesses

  • Spending work hours with your family by your side

  • The money stays in the family

  • You can maintain traditions

  • Personal conflicts can interrupt business

  • No personal time off

  • Fewer rules can lead to too much leniency

  • Potential lack of fresh ideas

  • One revenue stream

Pros Explained

You Trust Your Business Partners

There's a pre-established trust and dependency when you work with the people you live with, so you don't have to worry about trade secrets leaking, nor may you feel the need to micromanage. For some businesses, this is a must.

“Because we sell jewelry and gemstones in the tens of thousands of dollars, trust is key,” Jeff Moriarty, who operates Indiana-based family business Moriarty's Gem Art, told The Balance in an email interview.


Trusting your family members to handle and know business operations and finances also creates a safe space to openly discuss challenges and navigate difficult decisions.

Trust can also push you to take healthy risks because you know your family has your back. It creates a feeling of support and togetherness, which can help you survive the tough times. “Building something together gives you the chance to look back and say, ‘Against the odds, we did that together,’ ” Kristin Meyer, owner of Southern Crafted Shutters in South Carolina, told The Balance via email.

You Understand Each Other’s Strengths and Weaknesses

The best part about working with your family may be that you likely understand each other and can compensate for each other’s weaknesses.

For example, if one member is better at math and the other excels at advertising, it’s easier to divide the responsibilities accordingly and make up for what the other lacks, instead of hiring someone new for every role. This is particularly helpful in the early stages when the business is new and there’s little scope to spend a lot of money on hiring, training, and retaining external workers. It can also help navigate difficult situations, such as when customers complain; a family member with good people skills can handle in-person issues, while someone with good computer skills can solve online queries.

“Operating a business alongside the people you know best, and who know you best is a huge advantage,” George Civiletto told The Balance in an email interview. Civiletto works for his legacy family business Tuscany Market & Deli, which has been passed down from generation to generation since 1918. “It allows you to work better as a team and accommodate each other’s strengths and weaknesses to achieve success.”

Spending Work Hours With Your Family by Your Side

Owning and operating a small business typically takes a lot of time and energy, so emerging entrepreneurs often spend several hours at work, away from their families. This isn’t so bad when it’s a family-owned and operated business, according to Joe Darragh, co-founder of  family-based online company Pillar Digital Marketing Agency. “Your loved ones are by your side the entire time,” he said in an email to The Balance.


Building and growing a business together with your family takes a lot of work. This experience may bring you closer in and out of the business.

The Money Stays in the Family

One of the biggest reasons people enter family businesses is to keep the money within the family. When you’re working with the people in your own household, the revenue stays in the house, and all the members benefit when the business flourishes. Salaries can also be flexible as the money comes and goes out of the same house. This flexibility can help small businesses navigate the rapidly changing economy where the income may never be fixed.

You Can Maintain Traditions

Whether your family has a tradition of making a certain meal every year to celebrate the holidays or loves to visit a certain region of the country every summer, you can bring those traditions into your family-owned business.

For Heather and Michael Heard, owners of Ray’s Millpond Café in Georgia, they’re able to keep alive traditions that embody their Southern culture. The Heards told The Balance in an email that they’ve been able to preserve the family’s seafood traditions for over 60 years.

Another example is Buddy Foy Jr., owner of two family restaurants inspired by their family’s heritage: Chateau on The Lake in New York, and the Chateau Anna Maria in Florida. Through these restaurants, the family hopes to build a business that will be a legacy their daughters can enjoy and share, if they so choose.

Cons Explained

Personal Conflicts Can Interrupt Business

The biggest problem that can come from working with your family is that when you have disagreements or arguments at the office, they carry home with you and vice versa, Moriarty said. Sometimes this can make it hard to be productive at work. If you’re not talking to your parents or partner at home, it can be difficult to act professionally with them at the store or office.

No Personal Time Off

Working with your family can lead to spending a lot of time together, but that isn’t always healthy. “The business can take over every waking hour,” Meyer said. “For example, we went away one weekend and while walking on the beach, we were talking business strategy!”

Meyer said that it’s just hard to actually remove yourself from the business sometimes, even when you’re not physically there. If you’re not able to set up rules around personal time, then it can be tough to feel like you get a break from your job.

Fewer Rules Could Lead to Too Much Leniency

When you’re working with your loved ones, it’s tempting to throw the rules out the window. Maybe there’s no strict schedule for when everyone needs to be in the office, so when your brother comes in at 11 a.m. every Friday, it’s easier to just let it go. If there’s no fear of being “fired,” your family members may feel less pressure to perform.


Just as with a traditional day job, you could establish job responsibilities and performance expectations for everyone in the family to follow.

Potential Lack of Fresh Ideas

Working with the same people every day could result in a lack of new ideas. Brainstorming sessions can become an echo chamber with everyone thinking along similar lines, and it may be difficult to notice blindspots as members living under the same roof can have similar perspectives. It’s important to recognize when that happens so you can bring friends into the conversation to help diversify ideas and thoughts.

One Revenue Stream

If the entire family is working on the same business, what happens if the business fails? The whole family could go into a financial crisis. “This can compound strains on family relationships,” Darragh said. “If your spouse has a wage-earning job, that can help weather the storm.”

But even if one family member has an income separate from the family business, it’s important to have an emergency fund in case the business fails. Save money where you can so that you can still pay your bills and keep a roof over your head.

Frequently Asked Questions (FAQs)

Is it a good idea to start a business with family?

Whether it’s a good idea to start a business with your family depends on several factors. It’s always important to discuss this with all the members to ensure they’re on the same page. Don’t start a business just because you want one. Consider demand for your product or service, and what could happen if the business doesn’t work out.

How do I start my own family business?

To start your own family business, decide on an idea, read up on the basics of operating a business, and divide the responsibilities between the members who choose to be involved. Figure out how you’ll fund the business, whether through savings or a loan, and it’s important to set concrete goals. Set aside time to get the important tasks done and promote your new family business when it’s ready.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Small Business Administration, Office of Advocacy. “Frequently Asked Questions.”

  2. Facebook. “Tuscany Fresh Meats & Deli on May 5, 2018.”

  3. U.S. Small Business Administration. “10 Steps To Start Your Business.”

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