PEOPLE in the North East are less likely to start a business with another family member than in most other parts of the UK.
More than half – 53% – of those quizzed nationally said they would not go into business with someone they were related to, but the figure climbed to 58% in the North East.
Seven out of 10 of those who didn’t want to keep business in the family said they were put off because of the complexity, with 14% claiming they already argue too much, according to the poll by YouGov carried out for solicitors Shulmans.
But for those who were willing to take the plunge, seven out of 10 said they would do so because they could trust their family completely.
Jeremy Shulman, chairman of Shulmans LLP, said: “There are many good reasons to go into business with a family member, the most popular of which being that you trust one another. However, this is the very reason why you should protect yourself, and your business, by making sure suitable legal measures are in place.
“No matter how well one gets on with one’s relatives, a major disagreement over something to do with a business may well occur. People once certain they all agreed on every issue suddenly find they have very different ideas on a deal, or the direction of business growth and expansion. Or it can be that a family issue spills over into the business and the partners suddenly can’t bear to be in the same room as one another.
“This is why family must treat going into business with one another as exactly that, a business decision reached objectively and not as an extension of their family life.”
The ‘other half’ was the most popular choice of a business partner, with three out of 10 choosing this option, with couples who were already married or in civil partnerships more likely to than those who were living together: 46% versus 31%.
Almost four out of 10 people who would start a business with family members said they would do so because they were confident that they would be able to resolve any arguments. However, nearly 60% said they did argue with their family, with 11% saying that money was the main topic of contention.
And around four in 10 said they liked the idea of being involved in a family business because they would be less formality. But Mr Shulman warned that not putting the correct legalities in place could cause issues further down the line.
“This is particularly pertinent for those married couples who go into business together,” he said.
“A marriage may end but you can still be tied together through business with the ensuing financial knots that must be untangled. The family home might have been mortgaged to guarantee a business loan, for example. It is often not until crisis point has been reached when the lawyers are called in, instead of at the outset.”