Family Business: The Pros and Cons of Working with Relatives

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familyI’ve personally experienced the worst examples of the “family business”. My memories include relatives clocking in to get paid and leaving for the entire day, relatives opening the restaurant an hour late while customers are waiting outside and no prep work is done, and relatives stealing money and food in quantities that make you wonder if they are shipping it overseas to third world countries. But those examples are bland compared to the sheer entertainment of husbands and wives having pay-per-view-worthy fights over flirtatious servers.

Even with those experiences behind me, I’ve always thought the idea of a family business seamed idyllic if done properly. I’ve fantasized about a life sustaining business that can be passed down through generations, allowing my descendants to avoid the drudgery of main stream employment.

But is it really possible? There is plenty of evidence supporting both sides of this debate, so ultimately it’s a personal judgment call as to whether or not relatives working together will be disastrous or beneficial to your business. Here are some things to consider:

Pro: Employees that are related to you can give an effort and dedication to the business that you will hardly ever get from other non-related employees. The business truly becomes personal and they tend to have as much of its interest in mind as you do.

Con: Sometimes the opposite scenario occurs, especially when employing relatives that have an undesirable work history. Many times the family business can be the perfect place to slack off and do even less than an average employer would expect.

The solution: Be prepared to only hire relatives that you think will be a good fit for your business and be prepared to defend your decision. Also be willing to let family members go if necessary. If this seems completely impossible to do, without causing a family war, then avoid it altogether by only staffing your business with non-relatives.

Pro: Businesses tend to thrive when employees get along well with each other. Most families argue and bicker without developing any real hatred for one another. Families tend to accept even the most annoying traits in each other and certain behaviors don’t rub them as wrong as they would coming from a stranger.

Con: Sometimes the stress of working together can be the breaking point that does turn typical family bickering into actual resentment. Running a business together, especially high-stress ones like restaurants, have torn families apart and caused irreparable damage to relationships.

The solution: Avoid hiring a combination of relatives that already have volatile or highly emotionally charged relationships. Typically, husband and wives are susceptible to the most drama on-the-job, whereas hiring a cousin to work for you might not lead to daily hysterics and pan-throwing.

Pro: Supervising your relatives is a much more casual interaction than managing strangers. In some ways it’s easier to manage your family because, in a sense, they have to listen to you. Other employees have the ability to quit or walk off, but at the end of the day, family is sort of stuck together.

Con: When the management of family becomes too relaxed, things can quickly get unprofessional. Sometimes family members will assume that they should have more of a say in business matters than they actually should. This sense of entitlement can create chaos and destroy a business.

The solution: Make sure each relative knows that they only have the authority of the job they were hired to do. Each individual’s interest and ideas for the business need to be contained within their role, and that role should be clearly defined. Your hostess wife does not have the authority to change the menu, your dishwashing nephew does not have the authority to take money from the register, your cook brother does not have the authority to reprimand wait staff, etc. Never allow people to step outside of their roles even if they seem completely right to do so. Have a chain of command and follow it.

Last modified: March 7, 2013
Sasha Smith

This story is part of our Small Business Corner, a peek into the life and trials of small business owners.

Category: Insider's perspective, MPR Authored, Restaurants, Small Business, Small Business Corner, small business owners, Tips

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