The Bottom Line
Although America was founded on family businesses, before you enter into a business agreement with a family member, ask about their finances, commitment, availability, and have a discussion on business goals and ideals.
Don't try and write a family business agreement on your own. Put your trust in an attorney so that everyone's interests are protected fairly.
If one family member is an investor only and the other family member receives wages from the business, make sure if the business has a successful year, the investor family member receives his or her share of the profits. Have your attorney or accountant put this type of relationship in writing.
Don't try and pay personal expenses such as home mortgages, utility bills, or credit card bills from business checking accounts. Not only is this illegal, it probably wouldn't be done in a fair way. This is a sure fire way to ruin a business.
As your family business grows and perhaps allows for more family members to enter, reflect back on what worked and what didn't work. Give new family members the same opportunity.
A successful family business is one where everything is in writing, partners share in both income and expenses, and keep their hands away from cash accounts.
Should you go into business with a family member? Absolutely, but be fair, open, honest, and try and be true joint partners in all business aspects.