Skip To The Main Content

Thinking of working with friends or family? You need to read this!

A lot of the blogs that we have published on the Federation of Small Businesses (FSB) website are only relevant to those who are currently smaller business owners. But what about those who haven’t set up a business yet?

Setting up a business can be rewarding, exciting and offers you the chance to pick up new skills. It can be even more rewarding to set up a business with someone close to you. We wanted to explore the ups and downs of going into business with a loved one. 

We’re also going to take a look at the advice and opinions of small business owners who have had first-hand experience. We can provide you with some important tips you’ll need before making this very important decision.

Before we get started, if you have advice to offer then perhaps we can feature you in a future blog post. Email yourstories@fsb.org.uk with the subject “My Advice” or tweet us @FSB_Voice

Cons

Firstly we’ll explore the cons of setting up a small business with a close friend or member of your family. Don’t be put off by this, we think it’s best to look at both sides of the coin and we’re building towards a positive and uplifting end… we promise!

Here’s a run-through of the issues that might hinder you when it comes to setting up a business:

  • It can be really hard to work closely with family or friends, especially if your livelihood depends upon it. You might experience fundamental disagreements over the way the business is run.
  • It could put a strain on your relationship, power struggles can take place in the professional environment and things can turn sour.
  • It can be harder to discipline members of your family, especially siblings who don’t take your authority seriously and feel as is if the rules don’t apply to them. It can be tough to fire a member of your family.
  • The psychological phenomenon groupthink can impact small business owners. It assumes that a need for conformity and harmony might pressure or sway the eventual outcome of a tough decision, leading to a dysfunctional or irrational result.
  • Being close to one other means that you’re both aware of very personal information that could soon become public. Personal issues might also be carried over from home into work, this should be avoided as it will make any employees you have uncomfortable.

Pros

There are plenty of great reasons why you should work with friends and family, so let’s take a look at them:

  • You get to work with someone that you enjoy spending time with, which automatically makes the environment calmer and more relaxed.
  • There is a certain level of familiarity, they know and understand you so you’re less likely to have difficulty communicating.
  • There is a certain level of trust between you, you’re much more likely to be honest with this person about any worries you have. Similarly, you might feel comfortable enough to tell them exactly what you think when it comes to the business.
  • You’re working towards a common goal to make your business succeed. It’s rewarding to achieve so much with friends and family by your side.
  • You’ll also be making a lifestyle choice, becoming your own boss could eventually give you the freedom to choose when you work.

Thinking of working with friends or family? You need to read this!

Now that we’ve listed possible pros and cons, we should take a look at the initial steps you should take and the questions you might want to ask yourselves.

Work together first

This is a great tip! If you’ve already worked together and know that the chemistry is there, then great! If not, look at ways to strengthen your relationship before you commit to setting up a business.

Who does what?

One of the first things you should do is define your roles within the business. You can’t have control of everything, so divide up the responsibilities to whomever is best suited to them. 

This gives you the perfect opportunity to explore the strengths and weaknesses of those on your team. 

Work out wages and titles straight away. Try to remain logical when making these decisions, it’s not about ego or pride. Making these tough decisions early on saves you having any difficult or awkward conversations in the future.

Don’t sit back, push forward

Six months have gone by and you’re doing well, fantastic! Now what? Don’t make the common mistake of sitting back and letting everyone slide into auto-pilot. If you want your business to be a real success, keep pushing the group forward.

Involve newbies

Imagine starting a new job with a great role at a relatively successful start-up. The only problem is that nobody includes you in important decisions. That’s not the right way to run a business. 

Remember if you hire people, involve them rather than excluding them. 

Their input could be especially valuable, after all, they have a completely different view of the business and might see areas for improvement.

Be prepared to test your relationship 

Whether you’re married, best friends or father and son - there will be challenges. This isn’t to say you can’t overcome them. Some of the most successful businesses out there have faced incredibly hard times and bounced back.

Just remember that you’re working towards a common goal. You’ve already come this far so why let a few short-term issues spoil a possibly great future?


We asked small business owners to get in touch with comments and advice that they would offer to anyone thinking of setting up a business with a family member or friend. Take a look at what they had to say below:

Ishbel Moffat – Owner of Vintage VW Campers. Ishbel and Richie set up their business after trying to work together previously.

“I run Vintage VW Campers with my long term partner, Richie Baird. We met and worked together years ago as teenagers but in different departments. We then built a business plan in our 20s but didn't see it through, partly because we didn't always see eye to eye.

Now in our 40s, older and wiser, I'm delighted to say we are a brilliant team in the workplace.

Our secret is definitely that we have clearly defined roles and responsibilities. We are both natural leaders, so need the freedom to run our departments. We respect each other’s knowledge in our own areas. I couldn't do what he does and he couldn't do what I do - or at least not to the same competence level.

Richie is Fleet Manager and Chauffeur (contracting for me) and I run all the office side – accounts, marketing, website, customer service etc. and I am set up as a sole trader. 

As the business grows, we may eventually become a limited company, with both as directors. We are now in our third year and happy with how things are progressing.

Pluses of working together are many, it's good fun. We enjoy the commute together. We know what the other one's thinking often. We're a team at home and at work, which means we can help each other out in either area as there's two of us to spread the loads.

Minuses I guess would be our household income relies on the same business but considering we set this up after being made redundant by different employers within a month of each other, it's not something I dwell on.”

Mark Woodward – CEO of the Printed Cup Company. Mark works alongside his wife Jenny and their family.

“I think the most important thing is setting out areas of responsibility. I am sales and marketing and my wife is accounts and HR.

I have my daughter working for the business and found her extremely difficult to manage, until I asked one of the managers to manager her. That distance was invaluable and stopped any arguments.

Remember that no one person (including family or myself) is more important than the business.”

Gemma Whates – Co-founder of All by Mama. Gemma co-founded the business with her mother, Hilary.

“Business can take over and sometimes family trips and meet ups get hijacked with talk of the business. 

After all we are so passionate about All By Mama and we live and breathe it that it is only natural that we talk about it constantly! 

Family members can get frustrated with us when we talk about it all the time when we are together. It can mean we have less time for ‘Mother/Daughter’ activities.

We have an incredibly honest relationship, we don’t take anything personally as we know all decisions and opinions are entirely based on what’s best for the business.

We can get to the point with each other quickly. We also understand each other and know each other well which means we understand the way that we both like to work and can accommodate that in task allocation and when communicating with each other. There is no ‘getting to know you stage’.”

Chanel Cornelius – Co-founder of the 918 Coffee Co Ltd. Chanel and her husband, Justin, turned their passion into their living.

“People often ask me how I can work fulltime with my husband, they wonder what is left that we could possibly talk about at home.  

My reply is ‘we are a his and hers version of the same person.’

We are both driven and ambitious, we are dedicated and hardworking, we have the same goals and the same constraints, but above all we respect each other.  It is a vital part of our relationship that we have mutual trust and respect.  

During the day, I respect my husband and his decisions as the CEO our company and he offers me the same courtesy within my role undertaking compliance and sustainability. We are both experts in our field and we often seek each other’s advice if needed. 

Once at home, we are a regular family, I do the dishes, he does the bins! Our conversations are varied as we have both undertaken different duties during the day. We are then able to concentrate on our children and enjoying that time together as a family, we’ve had ‘our time’ during the day. 

I think working with a partner with similar ambitions can only strengthen a business.

We are both well informed and updated regularly with the different aspects of our dynamic company.  

It often surprises me that we can spend so much time in each other’s company. I don’t know how we do it, but we do and it works!”

It’s always useful to hear from people who have been through a similar situation. If you are thinking of going ahead with your business idea then take a look at our Resource Hub, where you can find more small business blogs.


FSB Online Legal Documents from FSB

Factsheets and downloads for: Employment Law, Taxation Matters, Business Law and Health & Safety information. All free. As well as monthly bulletins.

Find out more