Want To Work With Family Members To Make Money? 5 Key Signs It Might Be a Bad Idea
Written by
Laura Beck
Edited by
Angela Corry
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Working with your family might sound like a dream come true – who better to trust than your own relatives, right? But don’t dive into that family business venture or side hustle with your sibling, cousin or in-laws just yet. Pump the brakes a bit and think about what you’re getting into and who you’re getting into it with.
Sure, it’s true that some families make fantastic business partners. But others learn the hard way that mixing family with money can be a recipe for disaster.
Here are five major red flags that suggest you should keep family dinner and business meetings separate.
You Have Different Money Values and Spending Habits
If your brother thinks a “business expense” includes his daily $8 latte, but you’re clipping coupons for office supplies, you’ve got a problem. Or maybe you’re the type who wants to reinvest every penny back into the business, while your sister would like to take her share of the profits early and often.
Family members who have vastly different financial philosophies often clash when it comes to business decisions. These differences in money management are fundamental. They don’t just magically disappear just because you’re related – in fact, they’ll often get magnified when you’re under the pressure of running a business.
They’ve Already Borrowed Money From You (And Haven’t Paid It Back)
This one’s just straightforward common sense: if your cousin still owes you $500 from last Christmas and keeps “forgetting” to pay you back, what makes you think they’ll be any more reliable in a business partnership?
The best predictor of future financial behavior is past financial behavior. If your family members have a track record of being flaky with money, loans, or shared expenses, bringing them into a business venture is basically asking for trouble.
Every Family Gathering Already Involves Money Drama
If your family can’t get through Thanksgiving dinner without someone bringing up who owes what to whom, adding business finances to the mix is like pouring gasoline on a fire.
Families that already have ongoing money-related tensions – whether it’s about inheritance, who pays for aging parents, or splitting vacation costs – rarely improve when business profits and losses enter the picture. In fact, it usually makes everything worse.
You Can’t Have Honest Conversations About Problems
Every successful business partnership is going to have some difficult conversations and tough decisions–about performance, accountability, and responsibility. If you can’t be honest and tell your family member when they’re dropping the ball — because you don’t want to “hurt their feelings” or “cause family drama” — you’re not ready to be business partners.
Similarly, if they take any criticism as a personal attack or bring up childhood grievances every time you disagree about business strategy, the partnership is doomed from the start.
They Expect Special Treatment Because You’re Family
“But we’re family!” shouldn’t be an excuse for poor work performance, missed deadlines, or taking liberties with business resources. If your relative expects flexibility with schedules because you’re related, or assumes they deserve equal profits despite doing less work, that’s a huge warning sign.
The most successful family businesses treat each other like business partners first and family members second during work hours. If someone can’t separate the two, the arrangement won’t work.
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