Going into business with family members can be quite an interesting proposition! Whilst the notion of working with family is fantastic, sometimes things don’t work as planned, and lead them to a state of financial distress. In these cases, a business loan is often needed to provide a resolution (without addressing the emotional issues) to these problems. Some of these issues can include:
Sometimes family dynamics can do irreparable damage to your business. When family members butt heads the only choice ahead may be that one member of the family is bought out. With capital for a regular business loan not coming as quickly as desired when a quick exit is required, an unsecured business loan offers an excellent alternative.
Sometimes the sense of competition between siblings can lead companies towards financial losses. Perhaps it wasn’t the best decision to open the new location, expand manufacturing or launch that new product line. But pride, and stubbornness can cause problems and friction in a family business.
Your two worlds collide 24/7, so there may be an inbalance in the amount of normal conversation and work-based discussions. Or perhaps work invades your rest time, and you end up essentially never ‘clocking off’ the job. All of these paths lead to friction, and eventual burnout. In no time at all, the business is suffering, it is losing money, and all of a sudden, fingers are being pointed.
When you work with direct family members, it is critical to spend some time outside of work where you can discuss any personal matters, without the threat of work banter invading the discussion.
Considering The Others
When you work with family, it is natural to gravitate to them, and perhaps without realising, giving them preferential treatment. It’s quite possible that this behaviour makes other employees uncomfortable, and they feel like an outsider. This may lead to employees leaving the company – where you have the costly task of replacing the employee and retraining their replacement.
Having a team-like atmosphere is important for productivity, overall employee satisfaction and adds to the level of professionalism displayed by the business.
In short, business with family members can work wonderfully; some of the world’s biggest corporations are run by family groups. However, there are numerous examples of relationships that have struggled as a result of co-employment together.
By taking a smart, wise and well-balanced approach to business and money management, you won’t need to resort to measures such as business loans to keep your business running at maximum efficiency.
If you’re looking to get your business back on the right track with a business loan, have a chat with the team about how we can help you meet your business finance needs.