Keeping it in the family
Some people go to work just to get away from the kids but other successful businesses have been built as family concerns from day one. If you’re in business and thinking about bringing one of your family in to work alongside you, you may be concerned that there will be a few problems even if you can see the potential for success.
There are many reasons why people often steer a course away from working with family members:
- A relative may take advantage of their family status to coast through their working day rather than give their all, and how do you deal with that, or fire someone who is close to you
- A family member may make other employees jealous, laying you open to accusations of favoritism
- If things get tense at home, what would it be like if personal family problems came into the office with you as well?
However friends and family can also bring useful insight, commitment and skill to your business. There are several advantages of working with family or close friends:
1. You know them better than anyone (and vice versa!)
Working with your family may seem difficult at times, but it does have many benefits. The history between you and your family members equips you identify each member's strengths and weaknesses.
This means you are more likely to assign them to a suitable role, which gives the business a competitive advantage over other types of companies where employees’ true talents may not be recognised.
And just as you know them well, they also know you – so may be able to recognise stress or difficulties you are having and lend a hand.
In theory nobody cares more about your wellbeing than your family. This means they are more committed to your business’s success than an ordinary employee, as they were the ones that helped it get off the ground.
Family members are usually motivated to do what it takes to help the business survive and grow. That deep commitment often makes family companies resilient, even when business is slow and finances are tight.
3. Business Performance
According to Jim Lee, an economics professor at Texas A&M University, family businesses have the potential to be more profitable than other types of businesses.
Mr Lee spent nine years studying family businesses and found that businesses in which family members remain involved in management outperform companies that have managers with no family ties to the business.
The family businesses Mr Lee analysed outperformed non-family businesses in terms of revenue and employment growth.
4. Employee Relations
One business magazine has found that families are more likely to place the well-being of relatives involved with the company above their business obligations.
This can be sometimes detrimental to the financial side of the business, but in the long term can improve retention and motivation. Despite the costs, if you can strike a balance between strong employee relations and finding hard workers at a competitive price, your family awareness of life on the shop floor can help your business thrive.
5. Decreased costs
Employing family members can mean lower costs, as they may be more willing to make financial sacrifices for the sake of the business. Your family wants to see you succeed so they may accept lower pay than they would get elsewhere to help the business in the long term. In a cash flow crisis it is likely they would be willing to defer wages.
So despite the worries and concerns, there are real benefits to be had from working with your family. Creating a joint enterprise where the rewards ‘stay in the family’ can be a great motivator and bring out the best in everyone.
No matter who you employ, things can always go wrong. To protect against the unpredictable, arrange great public and employers liability insurance for your business today at ConstructaQuote.