03/28/18

How to Navigate Working in a Family Business

For many entrepreneurs, their business is a family business. In fact, 90% of U.S. businesses are family-owned. But working with those that are closest to you can provide some pitfalls that, if not addressed from the start, could end up damaging your personal relationship—or harming your business.

In honor of National Mom and Pop Business Owners Day on March 29, we’ve put together some tips to help you navigate working in a family business. The key is to treat family that works with you like any other employees; that means being professional and adhering to these practices.

Start by Clearly Defining Roles

Your brother Ted is eager to work in your coffee shop, but ends up browsing his Instagram feed all day rather than actually helping customers. Your husband wants to help you with your marketing business, but you’re worried he’ll step on your toes in decision-making.

When you hire a near-stranger, you set expectations from the start about what that person’s role will be. When you hire family, sometimes there’s an assumption they can do whatever they want or they’ll have more clout than you plan for them to have. That’s why discussing exactly what you expect of them is so important.

It may seem like overkill if your business is uber-tiny, but creating an org chart can be helpful in defining the hierarchy of who reports to whom. This should make it clear that, above all, your family reports to you. You are the decision-maker as the head of your business.

Also address the areas in which the individual will be responsible for making decisions, if any. If you hire your brother-in-law as your CTO, be ready to give him executive power to make all decisions regarding technology. If you’re constantly second-guessing him, the professional relationship won’t survive.

Leave Work at Work

This is especially important for spouses who work together. In the early days of running a business, it’s all you can think about. But when you’re already at work 40+ hours a week and then you mentally bring it home and keep talking to your spouse/business partner about the business, it can put a strain on the relationship, not to mention make that whole work-life balance thing a bit harder.

It will take some strict rules to make this a habit. Turn off email or work phones when you leave the office. Table any business-related conversations until the next day, or designate a specific time (say, one hour) to discuss them, then put a pin in it. This can take awhile to build a habit, but here are some tips to put into practice.

This also applies to other family members. The last thing you want to do is have a family dinner where the only subject is your business!

Keep the Lines of Communication Open

While this is an important strategy for any business, it’s even more important when several family members work together. If jealousy, frustrations, or misunderstandings aren’t brought to light, they can cause even bigger issues down the road.

Make a point to meet with your family coworkers every month or quarter just to check in about how things are going for them at work. Are they feeling fulfilled? Do they feel like working together is successful and not negatively impacting your personal relationships? Do they have ideas about how the business can improve?

You want to make it clear that you’re open to all feedback and suggestions. If there are issues that are threatening your personal relationship, make sure you address them immediately.

Know When to Cut the Cord

While following these suggestions can mitigate issues in a family business, there are times when it simply won’t work out. Personalities clash. Some people are not well-suited for a particular role. Sometimes it takes time to figure that out.

If your family member seems miserable at work (or if you are because of the relationship), or if the business seems to be suffering as a result, first sit down to discuss the issue. If it can’t be resolved, then be willing to let that family member go. It may cause resentment at first, but make it clear that you’re doing it to save both your family and your business. Nothing should get in the way of your personal relationships.

Running a business with one or more family members can be a challenge, but it can also be rewarding. When you create a business together with people you love, the goal is to establish a legacy that succeeds well beyond your generation.

Get more small business tips from Lendio.

About the author

Evan Tarver, Fit Small Business
Evan Tarver, Fit Small Business

Evan Tarver is a small business and investments writer for Fit Small Business, fiction author, and screenwriter with experience in finance and technology. When he isn’t busy scheming his next business idea, you’ll find Evan holed up in a coffee shop working on the next great American fiction story.

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