The family business, whether it be a startup or a generational institution, is part of an idyllic American dream for some. Whether or not a family business owner plans or hopes to pass the business down to their children, they have to deal with the challenges of working with family.
While hiring a family member or working with your spouse gives you the immediate benefit of working with someone who has equal interest in the economic success of the business, working with your loved ones creates immediate potential for multiples conflicts. This includes the prospect of rough days in the work place impacting home life more than usual or awkward conversations when someone needs to be disciplined in the workplace. To make things a little easier, here are 5 tips to running a family business.
1. Set Clear Boundaries
There may be a mutual desire going into a situation in which you work with a family member to keep work and home life separate. This is not only good, it’s necessary. The key is communicating this desire and setting specific guidelines with your family member as to how the dynamic at work will work out. This can make it easier to handle difficult conversations in the workplace without it spilling over into life outside the office.
2. Limit Work Conversations to Working Hours
For your own sanity and the health of your home life, working with family makes it even more crucial to keep work at work. This means keeping conversations about work out of your home life. Some married couples find it useful to “vent” or let out the frustrations or more nagging thoughts about work on their commute home. This allows for some space to communicate those more persistent or bothersome thoughts while also giving a definite end point to when those conversations are welcome or allowed.
3. Keep it Legal
If your family member fulfills a role equal to “lower-level” or non-management employees of the business, it’s key to treat them as an equal to those employees at all times, in day-to-day interactions as well as on paper. No matter what an employee’s relationship is to you, it’s absolutely vital that they go through the same processes as other employees, all the way down to signed agreements and anything necessary to your business. This can help avoid costly fines or legal tape in the future, and help define your working relationship with your relative.
4. Clearly Define Roles and Reporting Procedures
While this may be part of the legal work, this point should be repeated and reinforced often in the workplace. In the home, roles may be fuzzy or blurred, and some tasks or responsibilities are shared. This is not the case in the workplace. While collaboration on certain projects or tasks isn’t uncommon, it is vital that your role and your relative’s role are clearly defined and made as distinct as necessary. As well, if possible, keeping your family member in another reporting tree, or having them report to another individual in management if possible, can help keep things professional, avoid conflicts of interest, and dodge disdain from co-workers.
5. Be Fair
It’s easy for someone to say they treat their family like everyone else when it comes to situations like this, but it can be difficult in the moment to remember to do so. To keep good relationships with your other employees, you absolutely must treat your family member fairly, for better or for worse.
Nobody liked the coach’s child on their little league teams growing up for a reason; don’t repeat that same mistake with favorable behavior in the workplace with your family business. At the same time, don’t overdo it. If they do good work, reward or praise them as you would any other employee.
This article was originally written on September 20, 2018 and updated on January 27, 2021.
I find it cool that you made a list of things one has to do in order to keep a family business running. My favorite tip was when you said that one should create a way to separate one’s work and home life to avoid getting into difficult conversations. Aside from that, they should also consider partnering up with a local finance program to help kickstart it. For example, if my sister asks me for help to open her trinket shop this year, I will refer her to a local finance company this weekend so that she can have enough money to create her first stock to sell.