National Mom and Pop Business Owners Day (March 29th) is a great reason to celebrate small family businesses and their community contributions.
Family businesses account for more than 70 percent of global GDP, and they generate between $60 trillion and $70 trillion annually, according to one McKinsey study. The study also states that family businesses are responsible for about 60 percent of global employment.
Read ahead to learn more about:
Starting a business with your spouse, siblings, parents, aunts and uncles has enticing benefits but there are also challenges with a family-run work environment.
Shared values, mission and passion. Most likely, you and your family will have a shared investment in the success of your business venture — more so than if you work with hired employees off the street.
Flexible work/life balance. Few coworkers will be more understanding of a sick kid or a dentist appointment than your own flesh and blood. Working with family can mean working with people truly vested in your physical and mental health, supportive of vacations and willing to bend to personal commitments for your own growth and development.
Comfortable workplace relationships. If you’re considering starting a venture with family, chances are you’ll be able to share a workspace, schedule, computer and more.
Focus on long-term spending and investment. “When the economy slumps, family firms far outshine their peers,” reports the Harvard Business Review. “They forgo the excess returns available during good times in order to increase their odds of survival during bad times.”
Lack of training and skills. Nepotism can be real. Sometimes the person doing the job might not be the most qualified, nor will they receive adequate training to do it properly. This can be frustrating for coworkers and customers alike.
Family drama creeps into the workplace. When the break room feels like a therapy session or a boxing ring, the lack of family and professional boundaries can create an awkward dynamic for non-family employees. It can also hinder business efficiency and slow productivity.
Larger financial risk. If all members of one family rely on a single source of income for their livelihood, there’s an increased risk to financial stability. Some risk can be mitigated with the right business insurance. But if the business fails, the sting could affect multiple generations.
First, learn what it means to bring your children into the family business fold. Some labor laws and tax implications offer incentives to bringing your children into the family owned business, such as:
Learn more about hiring your child as an employee at your small business.
NEXT makes it fast, easy and affordable to protect your mom and pop business — and you can do it all online.
We’ll ask a few questions about your business and give you a quote. You can select your coverage options and purchase your policy — all in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.
If you have questions, our licensed, U.S.-based insurance professionals are available to help.
Matt Crawford leads NEXT's content team. He's a small business insurance specialist and has worked with business owners throughout his career as a community journalist and content marketer.
You can find him at one of his many favorite local restaurants in the San Francisco Bay Area when he's not at work.
