Special challenges face a couple starting family business

For some, the idea of starting their own business is only a dream; for others , it's a goal they eventually reach. Three years ago, when my husband began to think of starting his own woodworking business, we sat down and evaluated the pros and cons of his idea. We discussed his strengths, his experience, and the probable pitfalls of such a venture.

He had managed his own custom-farming operation in high school, and he had put himself through college doing carpentry and painting, so we were confident that he had the ability and drive he needed. There were, however, some problems: We had no large power tools; we didn't have any money to invest in such equipment; and income from this type of a business tends to be sporadic.

One decision we made, which may have held back the initial growth of his business, was not to borrow any money. We would gear our personal finances to the income from my full-time job and put any money my husband made back into the business. By doing this we would protect ourselves from heavy debts and keep the business solvent.

Three years later, we have about $30,000 worth of equipment and don't owe any money on it and his business is continuing its steady growth.

If you are seriously thinking of starting your own business, How to Start a Family Business and Make It Work (New York: M. Evans & Co., $9.95), by Jerome Goldstein, is a first-rate guide to the ins and outs of what lies ahead.

In the first chapter, ''Is a family business right for you?'' the author says the answer to this question is more important than the specific product or service you are planning to sell. If a person doesn't have what he refers to as the three E's - experience, energy, and expectations - then the idea of starting your own business should never be more than just that, an idea.

Later in this chapter, in a section called ''Diary of a Start-up,'' Goldstein outlines the first year of his family's publishing business. He discusses the long hours (often 12-hour days); the inability to forget about your work at the end of the day; the gradual growth of his company from one room to two rooms; the fact the expansion doesn't always mean greater profits; that usually the first five years in a family business are tough financially; and that there are always unforeseen drawbacks.

My husband has certainly put in his share of long hours. As his business has grown during the last three years, he has found that 12- to 14-hour days six or seven days a week, are fairly routine. When he isn't physically working in his shop, he's usually out discussing business with a prospective customer or working on estimates.

As we have expanded to larger quarters and bought more sophisticated equipment, the profits haven't increased because we're still plowing every penny into the business. The finances have been tight. While friends have gone on fabulous vacations, we've spent vacations at home. But, because my husband has his own business, we were able to buy a house. Our bank doesn't provide mortgages, but it does handle small business loans, and because the property we wanted is zoned commercial/residential, the bank gave us the loan.

We have also experienced some setbacks of a sort not discussed in Goldstein's book. Six weeks after we moved into our new house, the barn my husband had been converting into his workshop burned to the ground, destroying everything. The fire was so hot it melted all his equipment; he didn't even have a hammer left. Fortunately, insurance covered almost all our losses and my husband is back in business in a new building with new tools.

At times like this, it helps to be able to find other ways to meet financial needs. During the time we were having the shop rebuilt, my husband accepted a large painting job from a family that knew he had been burned out; this job paid our mortgage for three months.

Although Goldstein devotes an entire chapter to financing the family business , in which he covers start-up costs, financial pitfalls, finding buyers, and preparing loan requests, he doesn't deal with setbacks as drastic as this. It is hoped most small businesses will never have to face such a problem, but their owners should be sure all equipment and any structures related to the business are properly insured.

''A family business can bring ... problems,'' Goldstein says. ''So can just about any job you'll have working anywhere. But unlike any job, a family business brings you the joy of continuing as a family entity.''