How many family members is too many?

December 04, 2025

by a searcher in Chicago, IL, USA

I'm exploring a business in the trades where 3 of the 6 employees are immediate family members of the owner, including a key employee who is the sibling of the owner. A 4th employee is a cousin or nephew. The owner is not retirement age and is looking to completely exit, but said his family members would stay with the business. Would the SBA even allow an org chart like this? Is this too risky to pursue?

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I concur with Sean. There are no rules regarding how many of the seller family members work for the business. However, if they are in key roles, you will need to get comfortable that they will stick around post-closing. You also have to think about the dynamics and relationship they might have had with the seller and how that might change with you in-charge. Just things to keep in mind. If you need assistance underwriting the deal from an SBA perspective, we offer a free review. You can reach me here or directly at redacted

Reply by a professional
in Montreal, QC, Canada

Oh boy, I've seen scenarios like that before. Was in DD with a Server Distributor on West Coast, phenomenal numbers, sticky clients, but high dependency on Family members running the business. One of them we discovered was actually key/vital to business ops, so the risk was the owner leaving and that member taking a job elsewhere and us being left with the bag. Do deep due diligence into each role, and scrutinise everything; I'm not saying Family members are bad, but there tends to be surprises that come with it.

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