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Do’s and Don’ts of working with Family in your Business

Whether bringing a sibling or a spouse into the fold as your Business grows or handing it off for a child to carry into the future, the idea of keeping one of your life’s biggest accomplishments in the family is often appealing.

For many owners, the biggest upside is the opportunity to work with loved ones and build a meaningful enterprise that will last for generations. An oft-cited downside is the difficulty of balancing family and work priorities and having to be both boss and parent.

But to do so successfully, as with any other aspect of a business, it must be done right. It would help if you found a way to manage every phase of your working relationship in a respectful way that allows you to maintain a powerful personal relationship both inside and outside the firm.

It’s not uncommon for small business owners to hire family members, providing several advantages. However, the potential for favoritism (nepotism) and conflicts of interest still exexistwhether real or perceived and can negatively impact the workplace.

If you plan to involve the family in your own business, here are some dos and don’ts to keep everyone on the path to success.


Establish a plan.

When thinking about bringing family members into your business, there can be a tendency to jump into the situation without considering the ramifications. Family involvement can bring about some major changes, so it’s best to be prepared. Think about how you’ll welcome those family members into the business. What responsibilities will they be given to start? Will they need to work their way up like other employees? How will you introduce them?

 Consider a written policy.

Look at your company culture and applicable laws to decide what type of policy makes sense for your business. Many employers limit the policy to situations in which an employee would have control over a family member’s employment (such as hiring, promotion, and termination decisions), work responsibilities, performance evaluations, or compensation. Most anti-nepotism policies broadly define family members: spouses/domestic partners, parents, siblings, children, household members, grandchildren, aunts, uncles, nieces, nephews, cousins, and in-laws…

It can be easy to fall into verbal agreements when working with family. If they’re working and on payroll, they need to be performing the assigned tasks and have the same legal documentation as anyone else. Not only does this protect the company from any issues with misclassifications, but it also ensures that everyone is on the same page regarding responsibilities, payment, and general expectations.

Communicate truthfully.

In any business, it is essential to have everyone on the same page. That is even more necessary when your family is involved. Communication is one of the best remedies to the possibility of confusion among the workforce, and it is invaluable for the family as well. If there is a plan for a promotion or even one of succession, it helps be open and honest with all parties. That way, you can make the best-informed decisions and promote understanding throughout the company and your family.


 Treat all employees fairly.

If you hire family members, make sure they’re qualified for the role and reinforce your commitment to a fair and equitable workplace. Stay out of decisions affecting their employment as much as possible and instruct their supervisor to hold them to the same performance and conduct standards as other employees. Don’t let personal conflicts seep into the workplace and always treat them professionally. Additionally, maintain transparency about what objective criteria your company uses to make hiring and compensation decisions.


Play favorites.

Similarly, some of the biggest risks in working with family involve differences in how they are treated compared to other employees. If a relative has the same job as another employee, they should be held to the same standards that the role requires. If not, you run the risk of creating a divide among the staff.

This extends to the hiring process as well. There is no inherent issue with bringing a family member onto your team. However, they should be subject to similar interview scrutiny and onboarding as the rest of the staff.

Dim the line.

For the sake of the business and the family, drawing a clear distinction between those two environments is essential to maintaining success. One of the tougher aspects of introducing family into your business is compartmentalizing personal and professional situations. Be wary of letting personal feelings affect the necessary objectivity in decision-making. Make an effort to have personal time when business is not a part of the conversation.

Take shortcuts.

Instead, think long-term.

You are in it for the long haul. Building a legacy while working with family can introduce some situations that affect your emotions at the moment, but you wouldn’t want to jeopardize the company’s lasting success.

How does a trademark protect your Business?

Follow all the steps of your typical hiring process, including an interview, background check, and drug screen, if applicable. Consistency is also important to comply with nondiscrimination laws. For example, you can’t subject some candidates to certain screening and selection practices but not others. If an employee recommends a family member for an open position, direct the family member to apply using the company’s standard procedures.

If you plan to put family members in leadership positions, ensure they are properly prepared and qualified to meet the responsibilities rather than rushing toward a change they may not be ready to make. That strengthens the path toward success for both family members and the business.

Family is important. But in the end, the business you have built and on which your family depends will only be strengthened if you stay objective and think of what truly gets everyone to the end goal.

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