Working with a family member is so much more than free labor and advice. For many small businesses in the United States, it’s the best way to make a living.

But as with any business relationship, playing different roles at a company can sometimes cause friction. And that can spell disaster when the feuding parties are siblings or parent and child. But for those who choose to go ahead with a joint venture, the advantages can far outweigh the challenges.

“There’s no substitute to the level of trust, loyalty, and commitment,” says Kimberly Eddelston, an associate professor of Entrepreneurship and Innovation at Northeastern University, in Boston. “You can ask more of a family member than you can of an employee, and they’re often much more willing to go above and beyond to help a family business succeed.”

For Jason Earle, president of Mycelium Holdings LLC, working alongside his father, Sam Earle, his corporate communications director, is a big positive. “There’s nothing like doing something you love with someone you love. There is absolute trust and faith on both sides.”

Another advantage is that family businesses can seem more customer focused, quality driven, and trustworthy, Eddelston adds. Chris J. Guerra, CEO of BrandOrders.com, finds that investors and clients react well when he calls his head of retail development—and father—J.J. Guerra, “dad” during meetings. “It conveys a sense of trust and relationship. It helps clients see our level of commitment,” Chris says.

Sabrina Parsons, CEO of Palo Alto Software, likes to keep it professional when working with father Tim Berry. “In business contexts, I always refer to my dad as Tim. Not that we’re trying to hide that we’re father and daughter, but if we do our jobs well, there’s no need for anyone to know of the personal relationship,” she says.

It is often the personal relationship that can get father-child teams in trouble. “Families can step all over each other, and that’s where the fights tend to happen, when someone wants the final say and another person feels that ‘it’s my call,’” explains Parsons.

The solution? “Have a definite division of duties and a clear delineation of roles,” says Matthew Siegal, who runs the retail side of Dr. Siegal’s Cookie Diet, a company started by his dad Sanford Siegal 40 years ago. “Father as boss and kid as employee sounds like a bad idea to both of us. If we were working on the same thing all the time we’d kill each other,” says Matthew. “But because my dad runs the product side and I’m president of the retail side, we use our skill sets to complement our business’ needs, and it’s not like we avoid conflict all the time—a lot of compromises have to be made in any company—but we avoid long-term problems.”

For those who don't already work together but are still considering the idea, entrepreneur, speaker, and author of Built to Sell: Turn Your Business Into One You Can Sell, John Warrillow, warns the nostalgia of it all can overshadow some tough questions:

• What if your kids are lazier than you? Most second- and third-generation family members feel entitled to the fruits of the family business.
• What if they just don’t want to be involved? No matter how successful and profitable your business, your kids may not want it. Would you want your kids to resent you for guilting them into the business down the road?
• What about upsetting your other kids? Would you want to irrevocably change your relationship with the children who are not invited to replace you?
• And what if you alienate your employees? As soon as you invite your newly minted MBA son or daughter to work in the business, your professional managers will dust off their résumés, realizing that Junior has won the lucky-sperm lottery and is about to leapfrog them on the company ladder.

While Warrillow heavily favors hiring strangers, those who decide to go ahead with a family-run business should consider how they would grapple with the issues he brings up. And having a plan to deal with breaking the news to existing employees that a son, daughter, or father are soon to be part of the business should be top of mind, experts agree. “Make sure that you stress the family member’s credentials. Make it clear that he is getting the job because of experience and skill, not because of the last name,” advises Eddelston. As for upsetting the other kids, the same advice applies. As long as they see the inherent value in the appointed child’s skill set, emotional conflict will eventually dissipate.

A challenge that most parents face is the role reversal. Learning when to pipe up, when to stay quiet, and when to keep fighting is key to a good working relationship. Says J.J., “It has a lot to do with respect. Sure, I have experience, but it’s really important for me—and any other father out there in my position—to put my ego aside and listen to Chris.”

Berry agrees. “Sabrina and I don’t always agree. In fact, when the downturn hit, I very much fought her decision to cut costs but not lay off any employees. I thought she wasn’t being aggressive enough in her strategy,” he says. But he stayed open-minded, and his wife reminded him that ultimately “Sabrina’s the boss.” Although the discussions got heated at times, they were able to agree to disagree, and the strategy has so far worked out for the company, which posted $10 million in sales this past year, growing from $6 million when Berry was head honcho.

“At the end of the day, smart people who work together are going to occasionally disagree,” says Berry. “But when the respect is there to really hear each other out, that’s all you can hope for with any business.”