Friends and family support

Friends and family are an informal source of support for an enterprise. They can offer help and advice, and may become quite involved — for example, helping you test a new product idea, run a market stall or talk through a pricing decision.

Their advice is usually free and immediate, so you can ask a question and get an answer quickly, without paying a fee or booking an appointment. It is also flexible and repeatable: you can go back as plans change and ask again. It may be based on personal experience, such as a relative who has sold goods at local markets. You may feel more comfortable asking someone close to you than a formal adviser, especially if you are worried or unsure.

However, this support has clear limitations. Advice from friends and family is heavily biased: they may want to encourage you, so they praise a weak idea rather than point out a flaw. They may be unqualified and may not understand your business, its customers or its costs. Their advice may be inaccurate, out of date, irrelevant or unprofessional. For example, a friend who has only worked in a large shop might tell you to order a huge amount of stock for your online phone-case business; that could tie up your money and leave you with unsold cases.

Friends and family are mainly a source of advice and support, not a guaranteed source of capital. They might lend money, but you should not assume they will; their main value is quick, familiar help.