Small family businesses offer people an option to bond in new ways with spouses, siblings and children while creating a company legacy that can be passed down through the generations. The process can be very rewarding, but is fraught with potential troubles. Financial aspects are the most contentious of these and must be handled carefully from the start to maintain peace in the household.
Separating Business and Personal Finance
Most businesses require merchant accounts to operate under the company name. These should be opened at the start of business under the business name. This protects personal finances and makes taking payments easier. Designate one or two family members to be in charge of the financial aspects of the business, but give equal culpability and benefits to all. Written and signed contracts are vital.
More consumers use credit or debit cards to pay for purchases and hire services than any other payment method these days. It is vital a new family business has a quality credit card processing account to take advantage of these customers or clients. Taking payments with merchant accounts like this can help a family business get into profit more quickly.
Checking accounts, credit lines and credit card payment processing accounts should be dedicated to company costs and accounts receivable. Operating the company as a separate entity will help if things go poorly and the business needs to declare bankruptcy or close its doors. This separation helps keep things organized and stress-free.
Separating Personal and Professional Relationships
Relationships often go awry when finances are involved. There must be an agreed-upon separation between family and business relationships and space. Even if you run the business out of your home, set aside a room or desk space as business only. Keep regular business hours and make vows to never talk about the company during dinner or right before bed.
Starting a business with family members can be both stressful and rewarding. With proper planning, attention to detail and separation of both finances and personal relationships, they can be great successes. Dedicated merchant accounts, legal contracts and designated office space can help make things easier for all involved.