If you’re a legacy entrepreneur— an entrepreneur that inherited the business from family—chances are you employ family as well. Sharing a small business with family brings its own unique set of challenges to entrepreneurship. Managing the relational complexities requires discipline, boundary setting and recognition that family relationships are fragile and must come before anything else. So before you get to a point where communication channels are suffering, you’re no longer fond of each other or want to call it quits, adopt these six simple rules to keep your family/business relationships in check:
Rule No. 1: Don’t blur the personal/professional line
If you want your family business to survive, you have to learn to separate family and what is personal from business and business decisions. Your business is a business after all, with a bottom line and people depending on you for financial security. So treat family team members just like you would treat other employees. Formalize all contracts and job descriptions—never rely on handshakes or verbal agreements; they leave too much room for interpretation and conflict. Give honest and constructive criticism regarding your family members’ performances. And compensate them fairly for the work they do.
Rule No. 2: Don’t bring business into the living room
When every aspect of your life is rolled into one package, it’s incredibly important to establish healthy boundaries. Running a business with your family is a balancing act because personal relationships do need to be prioritized. Agree to operate under a system, such as no business talk after 6PM, during vacation or at family gatherings unless it’s been agreed upon beforehand.
Rule No. 3: Agree to stay in your own lanes
Sometimes to protect your personal relationships, you have to agree to give family members ownership of a process and trust them to handle it. This is especially important when your co-founder is from your immediate family. When it comes to negotiating contracts, you may need to be the one handling everything, while you hand off sales operations to your brother Ted. Of course you may still want to confer together as you make decisions, but to preserve the relationship, try to keep yourself and your opinions out of the things you don’t need to be meddling in.
Rule No. 4: Encourage your family to pursue their dreams
It’s so easy to fit family members into a box and fail to recognize the ways they’ve grown over the years and the skills they’ve developed. Part of your responsibility as a leader is to help your team members—including family—figure out their career goals and provide opportunities for growth. Be willing to let them experiment. Give your family resources to learn. Let them spread their wings a bit from the nest—you never know what amazing things they might come back with.
Rule No. 5: Never get by on your family’s supply
If you’re in charge of finances, keep all transactions and activity away from personal expenses as this can create distrust and confusion. Financial troubles are one of the top 2 reasons for divorce in America. Try to share financial management duties to promote transparency. If you are not the designated financial specialist, try to remain informed on all major financial decisions. It always helps to stay relatively informed on cash flow because you never know if you can spot inefficiencies from your designated station, that others can’t recognize as easily. Business always starts and ends with money, so you’ll need to have a solid pulse on what’s going on in your business at least daily.
Rule No. 6: Remember blood is thicker than water
When you’re working with family, disagreements, offenses and failures will be more emotionally charged than with other professional colleagues. Be in the business of addressing those issues head-on and handling them with tact and care. Always, always, always keep in mind that at the end of the day, your family relationships are the most important part of this whole venture. Those relationships will stay with you regardless of whether your small business flourishes or busts.
Learn more about how our partnership with Street Shares can help provide your business the capital it needs.