Is it ideal to involve families and friends in your business especially when you are just starting up? Do you think they will work harder for you to help you succeed because they will feel invested in your success?
It is not ideal, in my opinion, to involve your family and friends at the initial stage of your business. The reason is that your business is still growing at that point and you will need a lot of people that you can hold accountable when things go wrong. Sadly, in many cases, you won't be able to arrest or ask the police to prosecute your family members. This makes it not pretty okay to involve them when you are starting your business, but it is okay to do so when your business has a solid foundation.
I think it's not good to incorporate the members of your family or friends on business. Because it might cause conflict and personal interest on later times. Personal relationship will be compromise. In some instance they are abusive or irresponsible on their responsibilities or duties. If you reprimand them of their negligence they'll hate you for that. ( Ha.Ha.Ha ) It's a big disappointment.
I strongly encourage you to think about this ugly feeling and follow your gut before investing or doing business with a close friend or relative. This standard practice has two important benefits: In the beginning, it takes emotion out of the equation and helps you to focus on the merits of the opportunity. On the backend, when things get nasty or go bad, you will not hesitate to aggressively protect your interests and go to court if necessary.
They can be helpful if they treat you professionally and consider your business a serious matter. It really depends on an established agreement with them. If they agreed to treat you with respect and do their duty responsibly, then your business will prosper.
Nepotism is a word that is negative against working with family members. But I believe that some families have ideal relationship among the members so it would be fine. However it is generally frowned upon when a company is managed by siblings or even cousins.