How to Manage Family and Friends

Every year more and more individuals are striving to get into the business of owning their own business.  Our culture and younger generation want to get away from the “rut” of everyday life at the office.  They want to be in charge of their own destinies without having to show up at the office every day and be told what to do and how to do it.  Thus, they venture into a business that they can call their own.

So now these new entrepreneurs are in charge of their destiny.  Time to get the business underway.  What sometimes comes out of the woodwork is that family and friends now know that you are a new business owner.  They all wish you the very best and offer their support and assistance with anything that may be needed to ensure the business is a total success.

Along with all this friendship and friends though, comes the realization that some of these same folks may be asking you for jobs and positions in the new business.  This is where it gets really tricky. Hiring friends and/or family as employees is like walking a fine, thin tight rope.  The new owner will need to try and avoid favoritism, nepotism, conflicts of interest, and double standards without causing great family and friendship stress.  Any one of these actions can create unnecessary chaos in the new business.  If not handled properly and professionally, you will certainly alienate and maybe even lose some family members and friends.

However, no matter how careful, transparent and fair a new business owner is, they will still encounter perceptions and incidents of favoritism and special treatment.  Perceptions can become reality.

Some actions that may assist in this environment and help avoid conflict include:

1. Be transparent at all times and maintain a clear line of communication.
2. Avoid any obvious or perceived actions that can be misconstrued as acts of favoritism. Do not make the mistake of meting our harsh treatment while trying to seem fair and objective to your employees.
3. Maintain strict policies that applies to everyone in the organization. DO NOT give the best office to your favorite nephew or engage in any such acts of favoritism
4. Be certain to ensure that your policies and standards are applied in the same manner to everyone in your business.
5. DO NOT pay or offer one person better compensation or benefits than the other. Everyone in the business should the accountable and compensated fairly and accordingly.
6. Do not hire friends or relatives if they do not have the required skills. You can open the door for them and offer them an opportunity but after that, they must make it on their own and earn their keeping the job.
7. If you hire a friend or family member under a trainee program, everyone involved MUST be certain of the training goals and objectives. While in training, maintain an accurate and meticulous account of progress or lack thereof.  This will be of extreme importance if you should have to discipline or terminate an employee if they do not work out during the training process or thereafter.
8. If the employee does not work out, do not be reluctant to terminate. However, as noted in step above, proper records and documentation will avoid costly and time consuming court battles should the employee decide to protest the termination or disciplinary.
9. All agreements must be formalized, put in writing and have all necessary signatures and concurrence with the parties’ understandings. This minimizes the prospect of complaints and suits resulting from termination or disciplinary actions.

These actions can be very useful but this is not an exhaustive list of actions that will help the new business owner to become successful and avoid conflicts with friends and family. Just remember that working with family and friends can be trying but in the end it can be a rewarding experience.

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