A family business is any business that is owned and operated by a family. The family running the business can be a husband and wife team, a father and son team, a mother and children team or an extended family enterprise. The size of the business can range from a small home business to an international corporation.
The advantages of running a family business include being able to work with your family, there are several tax advantages related to payroll taxes when you hire family members, your kids can work in a family business regardless of their age and you can generally trust family members to pull their weight in a business venture. On the other hand, the drawbacks include family politics and drama can impact your business, you need the involvement of your family members to run the business and business issues can cause rifts in your family. Family businesses can be a challenge to run, but they can provide your family with an income source that also allows you to spend time together.
A small business is generally classified as any business that falls under the SBA regulations for business sizes. These limitations vary by industry but include limitations on annual revenue and the number of employees. Generally, however, if your company has less than 100 employees and brings in less than $500,000 in revenue each year it can be classified as a small business.
There are many advantages of running a small business. The first advantage is that small businesses can be set up any industry that you are interested in. Next you can run a small business with a limited staff and with limited funds. Finally, your can format your small business to fit your interests, you family responsibilities and your lifestyle. On the other hand, small businesses come with a high level of risk, especially during the first five years of operation. Secondly small businesses will require a lot of your time, especially if you set it up as a sole proprietorship. Finally, small businesses have to compete against larger more established companies as well as other small businesses.
The decision to start a sole proprietorship small business or a family business really is going to depend on your family members. If you have family members that are responsible and that are interested in starting a business with you, then a family business can be a great way to limit your personal risk. However, if you don’t want to work with your family members, or if you don’t have family members interested in starting a new business then a sole proprietorship small business is a better option for you.