Some small business owners dream of creating a \u201cfamily business,\u201d that is having one or more other family members actively engaged in running the business.\u00a0 It\u2019s a romantic notion and very compelling to some . . . Mom keeps the books, Sis and Little Johnny do a variety of chores around the place, and Dad leads the whole happy parade.\u00a0 Ah yes, Americana at its best.\u00a0 But is that a realistic vision?\u00a0 Or is it just a pleasant passing thought that shouldn\u2019t be taken seriously?\u00a0 If you are considering bringing a relative into your business, or have thought about it in the past, please read below.<\/p>\n
\u201cHave your children go work for someone else before they work for you.\u201d<\/p>\n
That was a headline in a recent Daily Herald special section on family businesses, and it\u2019s not a bad thought.\u00a0 But if it were me, I would have left off the \u201cbefore they work for you\u201d part.\u00a0 If you\u2019re thinking about bringing a relative into your business, I have just three words of advice for you.\u00a0 Don\u2019t do it.<\/p>\n
I have spent a career trying (with only limited success) to convince small business owners not to bring relatives into their business.\u00a0 It\u2019s a nice idea, but a nice idea that\u2019s fraught with problems and risks.\u00a0 No doubt there have been (and continue to be) spectacularly successful family businesses, but for every one of those, there are probably ten or more that aren\u2019t so successful.\u00a0 They don\u2019t necessarily fail outright, but they are dysfunctional on some level.\u00a0 It\u2019s just that having relatives involved brings a dynamic to the business that is usually not helpful, rarely necessary, and sometimes even destructive.<\/p>\n
Consider the first and most obvious problem.\u00a0 Let\u2019s say you bring your son-in-law into the business.\u00a0 You thought the job you gave him was a good fit for him, but after awhile, it\u2019s obvious the arrangement just isn\u2019t working.\u00a0 So you have no choice.\u00a0 You have to let him go.\u00a0 Suddenly your daughter won\u2019t speak to you and Thanksgiving dinners aren\u2019t much fun anymore.<\/p>\n
Or consider how difficult it will be to keep talented people on your team once they realize that the top jobs are always going to go to a family member and that they have the wrong last name for any hope of advancement.<\/p>\n
Sibling rivalries are not uncommon in family businesses, and those can have all sorts of unwanted consequences.\u00a0 Then there\u2019s the problem of succession planning.\u00a0 What happens when one sibling learns that another has been anointed the Chosen One to lead the company after the patriarch (or matriarch) steps down?<\/p>\n
Relatives may feel privileged, or they may have an inflated sense of their worth or their importance.\u00a0 They will wield power and influence beyond their station (even if they don\u2019t intend to) just because of their relationship to The Boss.\u00a0 The list goes on, but the point is, a business owner with relatives in the business can become trapped between doing what\u2019s best for the company and its customers on one hand, or keeping peace in the family on the other.\u00a0 So why would you want to invite that sort of dilemma on yourself?\u00a0 The best way to avoid business\/family conflicts is to keep the business and family separate.<\/p>\n
Is my warning too late?\u00a0 Do you already have relatives in the business that are causing some unforeseen problems?\u00a0 Call me.\u00a0 We should talk.<\/p>\n","protected":false},"excerpt":{"rendered":"
Some small business owners dream of creating a \u201cfamily business,\u201d that is having one or more other family members actively engaged in running the business.\u00a0 It\u2019s a romantic notion and very compelling to some . . . Mom keeps the books, Sis and Little Johnny do a variety of chores around the place, and Dad<\/p>\n