Family members or friends may be able to provide capital on flexible terms.  Make sure it is clear whether this is a gift, a loan that must be paid back or a stake in the business.  Write down the terms of any loan or investment to avoid misunderstandings and difficulties in the future.  Draw up a business plan and cash flow statement to work out when and how a loan will be repaid.

Family may want to be more closely involved in your business operations than a commercial lender.  Will you need to give them regular progress reports?  Maintaining good communications could be advantageous if you need to alter the repayment schedule.  Honour your debts to friends and family if you want to keep your relationships happy.  Take legal advice if you wish to establish a partnership or offer shares in a limited company.  
 

Business Link West and CEED have advisors who are familiar with the the problems of running a family business.  You could also contact the BDO Centre for Family Business.  University of Gloucester researches family business issues and offers an MBA and short courses in this area.