Family business: when colleagues are family

In a family business, it is important to balance business interests with family obligations

Family members working togetherWhen the family is involved in business, it binds the members together with a common goal. They have a fantastic opportunity to share the dream of success at profession and enjoy a greater sense of teamwork.

Why mix family with business?


The number one reason for hiring family members in a business is loyalty. When they hire a family member, they also have the knowledge of the person’s family history, unlike in the case of a stranger. There is a trust that family members will not hurt or betray each other because of the common investment.

Marrying family and business needs

All businesses have jobs and tasks to be completed, and employees to be paid. If the employee is a family member, the wages remain in the family. In some cases, this is extremely important. A family member may work for less than the prevailing market rate, making the business more profitable. At times, a family member is hired for a job so that s/he earns money and not just receives it as a gift. This also helps the person to build his/her character.

How should a family business be run?

Follow a professional hierarchy

The family business can involve any family relation: husband-wife, parents-children, cousins, in-laws or even grandparents. These relationships can have a profound effect on the business, especially if the family order is not the same as the business order. For instance, a son being his parents superior can cause some tension and hurt feelings. Tension could also arise when the younger sibling is preferred over the older one for a leadership position. To avoid emotional family entanglements of this nature, accomplishments alone should be rewarded and each member must earn his/her position. Thus, it will be apparent to all family members that in the interest of the company, promotions or assignments are performance-based. Leadership of a family business should go to the most qualified member.

Match ability with business needs

To maximise success, matching skills and abilities of the family member with the needs of the business is critical. Failing which, business suffers because the requirements of the job are not met. In such circumstances, hiring a non-family member to fill the position is a good option. Getting an employee who may not be as loyal as a family member but has the expertise and efficiency for the job is a trade-off worth considering.

Maintain regular communication

Communication among family members can often be a blessing as they share so much in common. It is recommended that family members meet at least twice a month so that everyone feels heard and is kept up to date. Sharing of appropriate information unites the family and helps the business.

What should family businesses watch out for?

Family fights

The downside of a family business is that family dynamics can affect the business. A family quarrel, at times, can carry over to the business, affecting its daily operations or decisions. Family quarrels can be contained so that they do not affect the business, but when the fights become toxic, it can lead to huge losses. There are examples of businesses that have exploded because of negative family dynamics. Fighting for control, they lose the very thing they worked so hard to build.


When creating or guiding a family business, one is sharing with the world a belief that family is important and that through this business a family identity is shared. Being the leader is an awesome responsibility and  has many rewards too. Doing good work and producing a quality product is very rewarding.

The family business has the opportunity to provide employment as well as a shared experience. It most certainly can bring the family together in this common goal of success. By paying close attention to how each employee is treated, the business can draw out his/her best performance. The family business is filled with dynamic relationships and issues, and with effective leadership, the effort can bring great satisfaction and pride to all involved.

If you are a family business owner

Allow individuality

We work hard to build a dream and derive ultimate validation when our child too works at it. For us to know that our hard work will continue to pay off for future generations of our family is satisfying indeed. But our dreams are not always our childrens’ dreams. Even if they wish to share the vision, they will ultimately put their unique mark on the business.

We should refrain from making the family member an extension of the original dream. Recognise the specific and unique talent and perspective the family member brings. This encourages growth and a feeling of being respected.

Treat employees fairly

Keep in mind the needs of non-family employees so that you retain honest, qualified, and loyal people to meet business needs. All employees deserve to be treated fairly. Some non-family employees feel easily offended if a family member is hired or promoted ahead of them. Explain such decisions to them for a healthy work culture. Consider the feelings of others and their possible perceptions while taking decisions. If you offer too much latitude and flexibility only to family members, others will find it unfair. This is not good for the business. Don’t pamper your family members in the business; give them opportunities to prove themselves at tasks or skills, decision-making, and management. Don’t just hand it over to them, push them to earn it.

Lead by example

Being a good leader is like being a good parent. The best parenting skill is to live your life ethically and honourably so that children learn by example. Effective business leaders lead by example, working hard and being involved with employees on the job. If you run the business with your children, by being an effective parent you inspire your children to become effective parents as well. And the cycle continues. Your parenting legacy can live on through the generations, as will the business legacy.

Keep work to office hours

Don’t take work home. Family dinners are for family, not business. Avoid discussing business after quitting time. Too much work-talk at home can make the workday seem endless. Family business may require extra effort in order to be successful, but we also need balance in our lives. Keeping work, relationships and recreation time separate is vital for rejuvenation. Time spent just on relationships builds emotional connectedness. Time spent at leisure recharges us so that we work with more energy and vigour.

This was first published in the May 2009 issue of Complete Wellbeing.

Stephen Trudeau
Stephen Trudeau is a clinical psychologist, radio host, television personality, author, and much sought after public speaker. He works closely with many business leaders to help maximize their leadership potential.


Please enter your comment!
Please enter your name here