Family businesses are the cornerstone of the American economy. The U.S. Chamber of Commerce reports that nearly 60% of the country’s GDP is the result of family-owned businesses; employees from those businesses make up 63% of the workforce. It’s a very appealing concept to be in partnership with family members and build a legacy that can be passed down to the next generation. If you’re interested in going into business with your relatives, there are some things to consider when figuring out how to start a family business.
This can be a rewarding undertaking for families who want to enjoy a new venture, build wealth and leave a lasting tradition. Every family has their own unique set of motivations and goals for going into business. It can often offer greater flexibility with work schedules and family obligations. Family businesses can foster a sense of collaboration and teamwork among family members as they work together towards a common goal.
Five Things to Consider
But learning how to start a family business is not without its risks and challenges. Like any business, careful planning and communication greatly contribute to your success. Seek advice from experts such as lawyers, accountants, and business advisors to ensure that the business is set up for success and can provide the financial security you’re looking for.
The following steps are just the beginning of the many details necessary to build an independent startup.
- Define your business idea: Identify what type of business you want to start and what products or services you’ll offer. Consider your family’s skills, interests, and experience, as well as the market demand for your idea.
- Develop a business plan: Create a detailed business plan that outlines your goals, objectives, and strategies for achieving success. This plan should also include your financial projections, marketing plan, and operational plan.
- Assign roles and responsibilities: Clarify each family member’s role and responsibilities in the business. This will help to avoid misunderstandings and conflicts.
- Determine financing: Decide how you’ll finance your business. Will it be self-funded, or will you need to seek a bank loan or outside funding from investors? If the business is successful, it can provide a steady income stream for family members who are actively involved in the business. This income can create stability and financial security for the family. As owners of the business, family members can build equity in the company over time. This valuable asset can be sold or passed down to future generations. There are also tax advantages such as deductions for business expenses, and the ability to defer taxes on profits by reinvesting in the business.
- Choose a legal structure: Decide on the legal structure of your business, such as a partnership or limited liability company (LLC). Consult with a lawyer or accountant to determine the best structure for your business. You’ll also need to register your business, obtain necessary licenses and permits, and set up accounting and bookkeeping systems.
The Franchise Option
Determining how to start a family business is no easy task. But if you and your family have the entrepreneurial spirit, one way to have profit potential and success in a more streamlined fashion is by owning a family franchise. Through franchising you are given a turnkey business with a tested and refined business model — which means you don’t waste time figuring out what works and what doesn’t. You sign on with an established brand that has invested in marketing and advertising to build awareness of their products or services, giving you an established customer base. You receive training, ongoing support and a network of fellow franchisees to help with day-to-day business challenges.
Consider a franchise that is well-established, has shown consistent growth, is recession-resistant and an asset to the community. Wild Birds Unlimited is all that and more. We are a leading wildlife retail franchise — successful with our customers and our franchise owners.
With more than 350 stores throughout North America, we are meeting the growing consumer wildlife hobbyist demand. Our franchise owners serve as a true neighborhood resource when it comes to the bird feeding and watching hobby. This is an ideal business model for a family business that can be handed down through the generations.
If you are ready to learn more about joining our flock, inquire today. Fill out our form and we’ll get in touch to answer your questions and get to know you and your family better.