While you can’t choose your family, they do have an enormous role to play in the success of any business. The choice comes down to how you leverage their support.
Whether they’re actively involved or play a role behind the scenes, here’s why you should never underestimate the role of family in the success of your business.
Free focus groups
Family members are a great resource for testing an idea. They provide separate eyes to look over a problem and your potential solution; can give crucial early feedback on everything from design to pricing; and fundamentally can help determine whether that idea is worth pursuing.
Interestingly, families that endure these presentations usually have a few members who, whilst not entrepreneurs themselves, can see potential in a person and their ideas.
Yet successful business leaders know the difference between diligent feedback and well-meaning though unhelpful yes men and women.
Some family members will simply say “it’s great” no matter what; others recognise the value of constructive feedback and do so honestly – even if it may not be what you want to hear.
Be sure to recognise the difference – everyone in the family is welcome to participate, but for the sake of the business, some may need to be dutifully ignored.
Support money can’t buy
The most famous and revered entrepreneurs always acknowledge the role their team played in their success – and more often than not, that team in some way involved family.
A strong family network can be a powerful tool for any budding entrepreneur. They can:
- be willing to roll up their sleeves and help with the grunt work
- perhaps contribute professional skillsets pro bono (such as accounting, marketing, sales or design)
- be a great source of emotional support when you’re demoralised by endless “no’s”
- offer a helping hand to keep your household running so you can stay focused on your business.
That support is invaluable for getting the job done, particularly in those early days when time and money are in short supply.
Keeping the cash flowing
Cashflow problems are generally cited as the biggest cause of business insolvency in Australia. While there are many reasons for this – late customer payments, unforeseen expenses, poor management – short-term finance is often the immediate solution.
And behind personal finances, loans from family and friends are one of the biggest sources of cashflow assistance for small businesses.
Unlike banks, family:
- are generally quick to say yes or no
- can be cheaper and lower risk than borrowing from a lender
- already know and trust you, meaning they’re often more than willing to help, particularly if the loan isn’t for a huge amount.
Never underestimate the value of having this fallback cash flow option: it could just prevent your business from an untimely demise.
You’ve probably heard the saying that in business, it’s lonely at the top. But what if you bring your family with you on your entrepreneurial journey?
Your partner may be willing to gamble with you and use the family home as collateral or savings to fund your idea. Extended family may be willing to do the same and invest in your business or start-up.
They’re generally driven by two things: a desire to support one of their own and fear of missing out (FOMO) on a great idea in the making!
It means you’re not alone having skin in the game – a powerful force driving you to work harder and stay more motivated to see your idea through to fruition.
After all, how not to make fools of your family is now a considerable burden!
Alan Manly, Founder, Group Colleges Australia and author of “The Unlikely Entrepreneur”