What kind of family business should you start?

Have you been asking yourself lately what kind of family business should you start?

Today, I’m walking through some key things to ask yourself before getting too deep into the process.

If you want to take full advantage of this insight, grab a pen and paper (or paintbrush and canvas, rock and nail, or whatever you like!) to record your answers.

00:00 Intro

00:24 Topic Intro

00:54 Why it matters

01:43 Record Your Answers!

02:03 Question 1

02:18 Question 2

03:24 Question 3

06:02 Question 4

07:50 Question 5

08:38 Question 6

12:47 Bonus – 100 Family Business Ideas

One of the most common questions I get is, “What kind of business should I start?”

In the age of the pandemic, our thinking has been challenged when it comes to starting a family business.

Overall, research shows they’ve fared better than businesses without family involvement.

Here are some key questions to ask yourself early in the process to build a sustainable, aligned business that you love.

Record Your Answers

Before we dive in, get yourself something to record your answers.

A rock and nail, a paintbrush and canvas, or a pen and paper – any medium you like to visualize, write down, record, or document the thoughts you have about each question.

Take a minute, grab that, and then answer this first question.

Q 1- Who is on The Team?

Who do you want to work with, who is impacted, and how might they be affected or involved? If you decide to run the business from your home, everyone who lives in that home will be involved somehow, even if just through quiet hours or unusable spaces. Think about what that might look like for them now and in the future.

Write down all the names.

Q 2 – What Are Everyone’s Strengths?

The next question you want to ask is (for each person you wrote down above), “What are their strengths?”

I recommend a tool called the Clifton StrengthsFinder. It’s a good assessment for understanding a person’s strengths – helpful in choosing roles, jobs, titles, and businesses that utilize those strengths. In the best-case scenario, you want to build a team of people with different, complementary strengths instead of the same. We tend to attract others with similar strengths to ourselves, so it can require discomfort to build a team with a diverse set of strengths and perspectives, especially when you’re pulling candidates from family members. The more you pay attention to this early, the better chance you’ll have for success down the road. If you want to learn more, check out Strengths Based Leadership by Tom Rath, the same author as Strengths Finder 2.0.

Other tools can help you dive into that process as well. I’ve added links at the end of this post. Also, I have a video about uncovering your strengths in my How to Stop Anxiety and Negative Thoughts series.

Ideally, you want to figure out what each of the individual’s strengths is so you can figure out where to place them within the business in a way that will help each grow as an individual.

You will grow a collaborative effort by investing in each individual growing within their strengths.

Q 3 – What is the Vision or Goal?

The third question, which is a little deeper, is what do you want this business to be? Visualize the company in five years, ten years, 20 years down the road, when it’s a success, however long you believe that might take. When it’s a successful business, what will it look like? What type of responsibilities will you have? What kind of responsibilities will your family members have? What would it look like for you as a family unit running this business when it’s successful?

Visualize that. Think about it from the perspective of the day-to-day.

What are you each doing with your time? Are you running around at events? Are you at a warehouse? Are you talking to clients? Who is the “Face” of the business, and who is behind the scenes?

Do the outcomes you visualize for this business match the team’s strengths from the last question?

You want the container you build the business in – the business model, succession plan, etc. also to fit and be in alignment with those strengths and your collective vision of the future.

Make sure you like what you see when you visualize it.

If you don’t like what you see, take more time at the planning phase. It’s OK! It’s GREAT. Many people go out there, blow thousands of dollars on a business idea, then fizzle out quickly because they didn’t think through some of the basics first.

In construction, they have the saying, measure twice, cut once.

It’s the same in business.

Whether you invest hundreds of thousands of dollars of capital or thousands of hours of sweat equity into your business, it will cost you to build. Don’t discount the value of sweat equity. You’re going to put time and energy into this family business if you want it to succeed. It may feel like free time, time that you won’t get paid for directly. And it’s still valuable time. So make sure that what you’re building is something you really can see a clear future for.

There are a lot of different succession or outcome plans as well, so don’t get stuck thinking you have to build something that will stay in your family for 50 years. However, family businesses are far more likely to do so, statistically speaking. You could build the company to sell after attaining certain milestones, pass it to someone else, or as a family tax strategy. Keep evaluating and visualizing until that vision looks like something you want to see. Make sure it feels great, is aligned, and is in touch with your strengths. You’ll need this inspiration and long view to make it through the inevitable ups and downs of starting and running your own family business.

Q 4 – What Do You Already Have?

The fourth question you want to ask yourself is, What skills, knowledge, resources, materials, equipment, etc., do you (and your family members) already have?

If someone in your family is a professional roofer, starting a roofing company might make sense.

If you’ve just purchased a pressure washer, a pressure washing business could be a fit for your family.

If you have a business degree, consulting or other business services might be a good idea. Think about and write down the skills, knowledge, resources, equipment, or materials you or your family members already have that you can pull ideas from.

Q 5 – How Will You Get Your First Customer?

The fifth question you want to consider is, How will you get your first customer, and then, of course, subsequent customers?

If you can get your first customer very quickly, can you replicate that to get more customers, or will you need to develop a more robust marketing plan?

Will you use referral-based marketing or write a blog? Will you do Google or Facebook ads? You could do events, conventions, trade fairs. You could do Amazon. You could do Etsy and have a page with your handicrafts on it. There are a million ways to market, so start with thinking about how you’ll get your first customer, so you can test out what works, what doesn’t, and what the customer will pay for your product.

Q 6 – What are the Financials?

Number six, the last, but honestly, very, very important, maybe most important, but you can leave it till after you get through the other questions, are the financials.

You’ll want to ask yourself: How much money will you need to bring in with this business to (for example) replace jobs? If your family is currently working jobs, what will you realistically need to bring in to replace those jobs? Keep in mind that when you’re getting a paycheck from a job, they are already taking out things like taxes, social security, unemployment, possibly healthcare expenses, etc. Consider adding at least 30% to your net paycheck to get a base number of what you need to bring in (after expenses!) from your side business before you quit your job. You also want to think about what kind of finances you will need to grow. Can you afford to purchase the materials, equipment, or space necessary for that? Or will you need credit or investment upfront? If so, there’s a lot of ways to go about that, so don’t stress out about the how yet, just the what.

You also want to think about the financials from a profit margin standpoint. Write down all the costs you can come up with associated with running your business and selling your product and compare that to what you reasonably think you can sell. Make sure there’s room for growth, profit, and vision-based strategies.

So those are the six questions that I want you to think about as you decide what family business you should start. I shared a video on IG with 100 Family Business ideas, so if you’re still struggling for inspiration, enjoy it! Hopefully, you and your family can find something sustainable to build that will help enhance your lifestyle and future generations.

As always, I appreciate you being here, and I hope you like the video, subscribe to the youtube channel, share it with your friends if you’ve gotten anything of value here, and I will talk to you next week. I love you.

Disclaimer –

This video is NOT sponsored. As an Amazon Associate, I earn from qualifying purchases. This helps support the channel and allows me to continue to make videos like this one. But don’t worry, it does not affect the price you pay. 😉

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