Working with Family? 5 Tips for Your Future Success (and Sanity)

Linda Jenkins, December 10 2016

Working with family has the potential to be very rewarding. It can also be very trying and, handled poorly, may bring out the worst in you and your family. Here are some tips for making the most of this unique relationship. family business alliance

More than half of all small businesses in the US are family-owned and operated. In economic terms, family businesses are invaluable. Not only do they generate over 60 percent of the country's GDP (according to the Conway Center for Family Business), they also typically think faster and more openly than public corporations. These characteristics can deliver real benefits in terms of innovation, growth and job satisfaction.

But no one ever said that working with family was easy.

Running a business with your next of kin requires cooperation, honesty and self-discipline. Without the proper planning, there's a risk that your work will never really stay at work, but will bleed into family life. And if things do get misaligned, there's not much chance that you can quit and easily find employment elsewhere. You're too invested - and that makes it especially important to get the relationship right from the start.

The problem with families

Family-owned small businesses may be the backbone of the U.S. economy but sadly, two out of every three will not survive into the second generation. Problems include:

  • Disagreement about the business's vision and values. If family members disagree about the purpose and direction of the business, there's a risk that the business will end up rudderless. Without clear direction, the business will be unable to strategize for profit and growth.
  • Conflict. Some degree of conflict is inevitable in family-owned and traditional organizations. Problems occur if the family-owned business lacks the protocols for managing conflict in a constructive and rational way.
  • Lack of effective decision making. Some family businesses allow one family member to exclusively steer the ship. Others are run by committee. There are dangers in both approaches. The first may disregard better and more innovative ideas to run the business; the second may be paralyzed by indecision.
  • Work-life balance. Family life is incredibly vulnerable to the pressures of running a business. Family members must take extra care to balance the needs of work and family, to avoid pressures in one sphere spilling into the other. 

Five tips for making the most of your family-run business

Family members need a clear set of rules when working within a family-run enterprise. Tips include:

Create a clear division of labor

Ascribing clear job functions and a clear reporting hierarchy is mission critical to the success of your family-run enterprise. Make sure that everyone understands the role they fill and where the buck stops in case of conflict, to avoid stepping on anyone's toes.

Put it in writing

Written job descriptions, contracts, operating procedures and shareholder/financial agreements bring much-needed objectivity if conflict arises or personal feelings get in the way.

Set a boundary between family time and work time

When you are in the office, you talk business. At home, you talk family - and the two spheres should rarely cross. Language is important here. Try to adopt a professional manner in the office and avoid family nicknames or other informalities. If you feel that a family member is not respecting your boundaries, don't let it fester, bring it up immediately and respectfully.

Skill up in conflict resolution

It's hard to give criticism in any context but delivering criticism to a family member is incredibly challenging. Maintaining objectivity is difficult when you know someone well and can relate their current mistakes to previous actions and misdemeanors.

Recognize when to get help. If your family dynamic is suffering because of pressures from a business, get help from others. First, use this simple tool to assess the damage, then reach out for counseling in your local area. It may take a combined effort from counselors, finance, or accounting professionals to repair a damaged relationship. Smooth the process by seeking conflict resolution training or hire a professional mediator to nurture you through conflict situations.

Have a plan B

What will you do if the family business - or your place in it - fails? Having a backup plan in place is a good idea since it limits your exposure if things go wrong. Make sure you keep up with your external networks away from your family and take the opportunity to add to any skills that can help you get another job in the future.

Working with family can be incredibly rewarding but ultimately, you're running a business and everyone needs to treat it as such. Stay professional, set boundaries and manage expectations, and you should be able to enjoy the fruits of your combined labor.

Important resources for family business

Family Business Magazine - National Directory of Advisers