Family-owned enterprises are the foundation of America’s small business tradition. And even if your family isn’t involved at the outset, a relative is often an ideal candidate for a role where trust or special expertise is necessary.
But is working with family members always a good idea?
Business consultant and USA Today “Ask an Expert” columnist Steve Strauss says it’s important to first look at the pros and cons of these situations.
“One of the best things about working with family, and maybe one of the worst too, is the familiarity you have with one another,” Strauss says. “There is a shorthand that you have with family that you do not have with the world at large, and when you get along well with that person, that can really work to your benefit. Working with a family member you like can really be fun.”
It’s also an advantage if a family member has different strengths than you. “That give and take can save time and hassle since you have already spent years together,” Strauss adds.
But mixing business and family can hurt both entities as well. “On the business side, if things don’t work out with the family member, disciplining, not to mention firing, that person is very difficult,” Strauss says. “Similarly, your loved one may not show you the respect that you deserve and need in the workplace. And that, in turn, can either hurt morale or invite similar disrespect among others in your organization.”
Another complication is that family members may feel exempt from rules that apply to non-family employees. “They may resent your authority, goof off, or not understand when you can’t or don’t give them a raise,” Strauss says. And if there is a work-related rift, the damage may have an irreparable ripple effect across other family relationships.
So how should you proceed? “Unless you have an incredibly good fit, and everyone understands the rules and you have set up some guidelines, working together runs the very real risk of damaging all sorts of family relationships if things go south,” Strauss says. “And unlike a disgruntled employee who leaves, a disgruntled family member will be around for the long haul.”
In other words, even if the potential rewards of working with a family member outweighs the risks, clear, constant communication of roles, expectations, and results are be essential for as long as the family member is an employee. Otherwise, neither work nor home will be a pleasant place.
To learn more about operating a successful family business, contact Raleigh SCORE. We provide free, confidential business mentoring and training workshops to small business owners. To schedule a free appointment with our experienced counselors, go to http://raleigh.score.org, or call us at 919-856-4739.