Ever dreamed of starting a family business? Investing in a franchise opportunity with friends?
Businesses owned and operated by families can have incredible staying power. Volkswagen, Samsung, and Nike – all family-owned companies – are among the world’s most successful, leading brands.
It can be fun and rewarding to work with family and friends. But before you hire the people you care about most, it’s wise to consider the pros and cons.
When you hire family and friends, working together can feel comfortable and pleasant. You can vouch for their work ethic and values up front. You already know their natural talents, abilities, preferences, and skill sets – as well as their strengths, weaknesses, and how you can best work together.
When it comes to family and friends, it can be challenging to modify negative behavior or communication patterns. What’s more, it can be extremely difficult to confront a loved one when they aren’t acting in the best interest of the company. The temptation to avoid conflict or hurt feelings can make managing a friend or relative tricky at best – at worst, it can become a serious liability.
Always practice clear communication. Share business policies, practices, and expectations just as you would with any employee.
Pro: Streamlined hiring
You’ll save time and money when you have a crew of committed workers ready to go before you’re set to launch. With family and friends willing to help you, you won’t have to screen and interview candidates – or spend precious time following up on background checks and qualifications. You can hit the ground running, focusing your efforts on generating income and profit.
Con: The company has to come first
Building a profitable and sustainable business requires effective management, without exception. That means sometimes it may be in the best interest of the company to re-train an employee for a different role, ask a worker to take on additional responsibilities – or, in some cases, to let someone go.
When it comes to difficult personnel matters, it can help to seek guidance from an independent advisor.
Pro: Tradition is seen as a strength
Strong brands are easily built on the values we associate with family, such as honesty, trust, and enduring relationships. In fact, a recent study showed that customers prefer family-owned businesses for their perceived stability, trustworthiness, and consistent service.
Con: Too much tradition can hold you back
When a family business does things the way they’ve always been done, the company can suffer from a lack of diversity and innovation. It’s essential to keep an eye on market trends and changes in your industry, so you can adapt quickly and avoid missing opportunities.
Solution: Set up a board consisting of family members and an equal number of independent advisors.
Because family members and friends are personally invested in your business – both emotionally and financially – they can make fantastic employees. They’ll work hard, put in the extra hours when needed, and do everything they can to ensure your venture is a success.
The biggest challenge can be to draw the lines between work, family, friendship, and home. As an employer it’s crucial that you set boundaries, practice clear communication, and be willing to make difficult decisions so your business and personal relationships can thrive.
The Materials are provided for general information purposes only and are not intended as professional advice and should not be substituted for, or replace, such professional advice.