Are you considering starting a business with a family member? Perhaps you already own a business and are considering hiring a sibling or bringing your child into the fold once they're the right age. No matter the situation, here are seven things to keep in mind to help ensure your family business endeavor goes smoothly.

1. Separate Work and Family Life

When you work with your family, it's important to keep your family life and your work life separate. This is especially true if people outside of your family also work at the company. Separating these aspects of life will help maintain a professional work environment and keep emotions and any other personal issues out of the workplace so they don't impact the business. On the flipside, not bringing work into the personal family environment can keep relationships from being strained and help maintain boundaries.

2. Have Clear Roles

Each family member should have a clear role within the business so there is no confusion as to who is responsible for what. This will help foster an environment of accountability and prevent awkward situations if something goes wrong or a job isn't performed adequately.

3. Stay Objective

Just because you are family and have a more personal relationship than most co-workers or compared to other employer/employee relationships, doesn't mean you should engage in work discussions as if you're sitting around the dinner table. Keep it professional at work. Listen to what your family member has to say objectively, just as if they were any other coworker. Show them respect and treat them fairly and without any personal bias.

4. Remain Transparent

It's a good idea for all family members involved to be completely open with each other about their goals and intentions.

"Embrace transparency," suggests James Mayo at Entrepreneur.com.1 "Before going into business with family, have a vulnerable discussion together surrounding the collaborative dynamic you each envision, and set clear expectations to help achieve those goals. Make a genuine effort to remain respectfully straightforward in all of your business interactions, including triumphs, failures and uncertainties."

5. Make Sure Pay is Agreed Upon

Try to have pay matters discussed and agreed upon before you begin working with family members. This should prevent uncomfortable conversations in the future once you're already in business together. Make sure everyone is happy with the situation before going forward. Have salaries, benefits, bonuses, and potential raises clearly understood from the very beginning. Otherwise, problems may arise that can affect your personal and work lives.

6. Be on the Same Page About Hours

Just as everybody should be on the same page about salary, the same goes for work hours. Everyone should know that they are expected to work full shifts if that is the agreed-upon plan. If they'll be working part-time, that should also be figured out before moving forward. Situations may change, but they need to be official. One family member shouldn't feel that they can come and go as they please just because it's a family business. They should be expected to put in the same amount of work as people in comparable positions within the company.

7. Establish Feedback Practices

If you are the business owner or manager, and a family member is working for you, there will be times when you must give feedback.

"This is where working with a family member gets really tricky," says Rhonda Abrams at USA Today.2 "If your son resents you telling him to clean up his room at home, he’s not going to enjoy having you tell him how to improve on the job at work. As soon as a family member comes on board, let him know that there will be a performance review after the first 30 days and every six months after that. Be objective and constructive – not critical. Do this at the office, not at home. And leave anything that happened outside the office out of performance reviews."

Working with family can be a great experience and a way to spend valuable time with the people you love. Just remember to keep things professional during work hours and treat each other with respect to have a successful family venture.

For more advice on running a family business, visit Nevada State Bank’s Family Business Resources web page.

 

1. https://www.entrepreneur.com/article/424360

2. https://www.usatoday.com/story/money/business/smallbusiness/2022/05/18/family-businesses-8-rules-for-working-with-relatives/9808454002/

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC

 

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