Family-Owned Businesses: Do’s and Dont’s

As we head into the weekend, here’s expert advice from Robin Paggi, our resident guest blogger, on ways for owners of family businesses to recognize and prevent personnel conflicts.

Family-Owned Businesses: Do’s and Dont’s

My first job was working for my dad, Bob Rutledge, at his bait and tackle shop (Bob’s Bait Bucket). Almost four decades later, I now work for Jeff Thorn at Worklogic HR, where a number of past and current employees belong to the Thorn family.

Evidently, my experience being both a relative and non-relative in a family-owned business is not unique because, according to the article “The Facts of Family Business” on www.forbes.com, “about 90% of all U.S. businesses are family-owned or controlled by a family.”

Being employed in your family’s business can be a challenge for many reasons. In the article, “Working in a Family Business: Understanding the Pros and Cons” on www.mindtools.com, the reason at the top of the list is that “working with family members may sometimes lead to conflict.” Indeed! My husband grew up working with his brothers in his father’s business. One day at work, an older brother started bossing him around in a way he did not appreciate. Fed up, my husband dropped his tool belt on the floor, walked home, drove back to college, and never returned to the family business.

“Conflicts are part of a normal experience for many small start-ups and family-owned businesses,” said Carolyn M. Brown in her article “7 Rules for Avoiding Conflicts of Interest in a Family Business” on www.inc.com. True, but conflicts in family businesses are bad for all employees – those who are family members and those who are not. Ways for family business owners to prevent conflicts include:

Treating family and non-family members equally. “Don’t create two classes of employees – family vs. non-family. Be careful not to show family members special treatment,” said Brown. Although I no longer work with my dad, my three brothers and nephew do. The family business has expanded to two locations and has employed numerous people in addition to family members over the past 38 years. According to my dad, all employees are treated the same: “Everyone does the same work and plays by the same rules.”

My boss also agrees with this philosophy; however, he admits that he’s tougher on his family members than his other employees, which is not necessarily a good thing. “I caution employers that, while you want to show that you’re not favoring your family, don’t go overboard because you end up treating them so differently that it has a reverse affect.”

Creating a boundary between the family and the business. Family members who work together need to keep the business out of their home life and their family drama out of the workplace. In her article “5 Tips for Managing a Successful Family Business” on www.sba.gov, Nico Janssen said that, “Families will always bicker, but the challenge is not to let the bickering (interfere) with the business and rub-off on non-family employees…” Family drama is not allowed in my dad’s stores. “You’ve got to maintain a sense of decorum,” he said. “It’s foolish not to.” Family drama is also not present at my current workplace. In fact, if I had not been told that I’m working with Thorn family members, I wouldn’t have known it.

Other rules for preventing conflict that family business owners should consider include: not employing family members if they can’t make a contribution to the business; disciplining and rewarding family members just like other employees; communicating openly and honestly (don’t keep it a secret that family members work there and keep everyone in the loop – not just the relatives); and, don’t let family members take advantage of the relationship (such as allowing them to borrow company vehicles when non-relatives aren’t allowed to).

Working in a family business can be challenging for everyone involved. Employers who treat everyone equally and keep family and business matters separate help reduce conflict and increase the likelihood of the business’s success.

Robin Paggi is the Training Coordinator at Worklogic HR.

Robin last wrote for us on There’s More to Motivating Than Money. Before that she wrote on Love at Work: How Should Employers Respond, and prior to that about lessons for employers in the Brian Williams matter.  Prior to that she wrote about giving employees a second chance. Before that she wrote about making sure the applicant is a good fit for the job and before that about  cure for inappropriate behavior at work. Before that she wrote about cyberloafing, on business lessons from a Christmas story and before that about cell phone policies at work. She has also written for us on rules for holiday parties at work and before that about preventing workplace bullying.

 

 

 

 

 

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