Being a business owner gives you great control over your entrepreneurial decisions. These include the liberty to choose the people you bring into your team. As a leader you want to hire people who share your vision, and when you are starting out these are often the members of your family.

Working with family can be one of the most fulfilling experiences you will have as an entrepreneur. That is, if you get along and are able to work well together.

Family members as workmates can also be a breeding ground for conflicts regarding money and positions that put personal relationships on the line. The reverse could also occur: strains on personal relationships inevitably lead to issues with money and positions of family members in the business.

If you are considering or already are working with family, there are some things to consider.

How Divorce Can Affect Business

You may have begun a business with your spouse early into your marriage. However, circumstances may have led you to a situation in which you are seeking to file for divorce. Your children, personal assets, and business setup will experience drastic changes due to this.

It is wise to have a neutral third party mediate your divorce to come to a fair conclusion on how to split assets. In the mediation process, lawyers will discuss with both parties to reach an agreeable decision. It is less expensive than going to court and it also gives you more control on how to approach discussions.

Without an amicable conclusion, you are at risk for further complications. If you and your spouse were both involved in the business, from holding a position to contributing to ideas and concepts, you may owe them ownership interest as “repayment” for what they’ve done.

Through a proper discussion, you can gain sole control of your business and simply pay off what they are entitled to through other assets such as real estate, stocks, and the like. You can also opt for a property settlement note. This allows you to send your former partner payments over a certain period.

One other option is to simply liquidate the business and divide the sales price. This is, of course, the least preferable route to take, especially if the business is a primary source of income for the family.

Three Main Sources of Conflict in Working with Family

Family conflicts mixing into business issues do not only happen in marriages. Working with your parents, siblings, or children is also no guarantee of a smooth-sailing professional relationship. Here are some difficulties you can face when hiring family members for your business.

1. Establishing Workplace Formality

When you begin working with a family member, it can be awkward to set boundaries in the workplace. They can come in and act casually around family, which potentially alienates other employees in the team. This show of familiarity may also be inappropriate for certain situations, such as client meetings and pitches.

Suddenly treating them differently in the workplace can also create misunderstandings when not explicitly discussed beforehand. To avoid these uncomfortable scenarios, make sure that boundaries are established before their first day of work. In this way, you will have a similar expectation of how to address each other during work hours.


2. Showing Fairness with Other Employees

Another issue that could come up when working with family is problems with nepotism. This occurs when high-level staff in the business bring in family members who do not necessarily have the qualifications for the job. This can also take the form of giving preferential treatment to family in delegating tasks.

Hire family based on what they bring to the table. Executives in the company should screen family members in the same way other employees are screened during recruitment.

Show transparency to employees, too. Do not hide the fact that one or some of your staff are related to you. Remember: your openness helps build trust.

3. Pursuing Disciplinary Action

When a family member messes up on the job, how do you approach it? The tendency is to fall on either end of the pole. There are those who tend to go easier on relatives, while others are much harder on family in the workplace.

An established disciplinary action policy makes the consequences of certain actions clear to everybody, including family. Avoid issues by emphasizing to both relatives and other employees that the policies apply to everyone, no matter the relationships.

Hiring family members often feels like trying to avoid landmines, especially when there is a lack in communication. Good communication brings you far in maintaining good workplace relationships with relatives.

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