What Are the Three Types of Family Business?

Starting a Small Family Business

To start a successful family business, follow these steps:

1. Conduct research on the target market.
2. Involve the next generation in planning.
3. Assess each family member’s skills and capabilities.
4. Establish a conflict resolution plan.
5. Key legal steps for starting a family business: Choose a structure and create a business plan.

Types of Family Businesses

The main types of family businesses are:

1. Sole proprietorships – owned and run by one individual.
2. Partnerships – owned and operated by two or more family members.
3. Corporations – a separate legal entity owned by family shareholders.

Stages of Family Business

The three main stages of a family business are:

1. Stage 1 – The Founder/Controlling Owner Stage:

   • The founder focuses on creating a new business.

2. Stage 2 – The Sibling Partnership Stage:

   • Organization increases, outside expertise is needed.

3. Stage 3 – The Cousin Consortium Stage:

   • Involvement of diverse family members, new ideas are introduced.