Tips for Starting a Business with Friends and Family, by Rocklin and Roseville area Attorney Terry L. Gilbeau

rocklin attorney business rosevilleAs many times as business experts warn people who are family and friends not to go into business together it happens time and again. It’s hard to resist. After all, we get excited about a business idea, we share it with those we love and know best, and before you know it, they are in. Perhaps it’s because of needed funds, or any number of other reasons, but it can spell out trouble if people don’t play their cards right.

In Sacramento, Roseville and Rocklin, and beyond, there are routinely family and friends who join together to open a business. It sounds great, maybe even a little comforting, but that doesn’t mean it always ends that way. To help avoid the many problems that can come from starting a business with family and friends, keep these tips in mind first: 

  • Think it through. Rather than just jump into it, sit down and really talk it through. Discuss working together, what happens if there are problems, and how it can negatively impact the relationship if something goes wrong. Decide if your relationship can handle such issues.
  • Keep it professional. Just because you know each other doesn’t mean that you should not act professional. Being professional, regardless of who you are dealing with, is always going to be the best route to take and will help keep you out of some hot water.
  • Separate the issues. Agree to keep work at work and your other relationship outside of it. In other words, when you all walk out of the office, leave work behind and wear your hat of friend or family member. Don’t make your entire relationship, both in and out of the office, based upon work.
  • Determine ownership status. Discuss who will own what portion of the business. Will it be 50/50, or will there be a different scenario? Remember, it’s a little difficult to have more than one boss running the show. Figuring this out ahead of time can save a lot of headaches later on.
  • Hire an attorney. This is one time that you will absolutely want to work with a lawyer. It is imperative that your plan be put on paper and it all be legal, just in case a problem arises down the road. This is an investment that protects both of you.

After you have gone over these things, if you still want to start a business with family and friends, it just comes down to the business side of things. If problems arise, focus on working through them amicably, for the sake of the business. If issues cannot be resolved, one party may wish to leave the company, selling their portion. Again, that would be an ideal time to work with an attorney, whether you are in Rocklin, Sacramento, or around the nation.


The Law Offices of Terry L. Gilbeau provides personalized counsel to clients in a variety of business and personal matters, including creditors’ rights, debt collection, products liability and international transaction issues. His office is located in Rocklin, CA, just outside of Sacramento, CA, near Roseville, Lincoln, Auburn, in Placer County and can be reached at (916-626-5539) or email Terry at Click here for the firm website

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