The first step in starting a small family business is to conduct research on the market you plan to serve and develop a business plan. Having a thorough understanding of your target market and how your business fits into the market is essential for success.
Identifying Strengths and Weaknesses
The first step in starting a family business is to identify your strengths and weaknesses. This involves assessing each family member’s skills and capabilities to determine who has the necessary experience and expertise to manage the business.
Legal Requirements and Business Structure
When starting a family business, there are some basic steps you need to cover when it comes to business law and your family. Key legal requirements include choosing an appropriate business structure and creating a business plan to define the roles and contributions of team members.
Conflict Resolution Plan
In all businesses, conflicts arise during decision-making or project management. Therefore, when trying to start a family business, it is important to establish a conflict resolution plan that best suits the family, such as arbitration, mediation, or neutral evaluation.
The three main types of family businesses are:
- Sole Proprietorships: Owned and run by one individual
- Partnerships: Owned and operated by two or more family members
- Corporations: A separate legal entity owned by family shareholders