Family & Small Business: Do They Mix?

I think this topic can be a controversial one, because it usually conjures up images of either positive or negative experiences for people.  Fortunately and I guess unfortunately for me, I have had a mixture of both experiences.  The only good thing coming out of the negative side is I can now share this with you.

Every family dynamic is different, and I know there are a lot of families whose relationships with one another are quite dysfunctional, vitriolic, full of jealousy, etc.  So if you have this, you can probably guarantee they won’t be the best person/people with whom to mix business with. And let’s face it, there are a lot of people who probably consider their friends as family more than their own family.

Looking back at my experiences, I can now clearly see the reasons why having family involved were an integral part of running any of my businesses.  The first thing to point out is that I was and still am lucky enough to have a good relationship with a particular family member and for that reason, I trust them explicitly.  This is probably one of the prerequisites of having your family involved in anything in your life, whether it is business or personal issues.  Because I trust this person completely, this was a huge advantage for me.

For example, when it came to the financial side of things, it was a huge relief to have someone on “my side” that I could trust not to steal from me (e.g., the cash register in our restaurant).  When money was going missing from the cash register in many of our restaurants/cafes, unfortunately it ended up being the manager, every time. With a trusted family member you don’t have this worry.  I could give them access to all of my bank accounts online so they could do my banking, including transferring funds between accounts, paying wages, including their own wages, and so on.  And I could still sleep soundly at night.  Now I don’t know about anybody else, but you do not give this kind of access to just anybody.  As I’m writing this, I realize that I’ve probably taken this for granted because I cannot imagine what everybody else does.  Maybe they have a trustworthy accountant, bookkeeper, partner/spouse?  This is just one advantage, but as you can imagine, a significantly important one.

On the flip side  I had the opposite experience with an untrustworthy family member, and it cost me a fortune. They would sometimes not turn up to work, or come to work and then disappear for hours without telling anybody.  And I would find this out from my other employees or by going onto the computer and seeing that for a block of 3 or 4 hours, no e-mail inquiries were answered.  Or the next day I would wonder why we had very few orders come through.  It went on for years, even after their first, second and fiftieth chance.  Now you’re probably wondering “you idiot, why didn’t you get rid of them immediately?”  And my answer is, it’s just not that simple.  If it was just an employee or business partner, with no family ties, you would fire them on the spot and could cut them out of your life and write off the loss as a bad debt.

However, with family, and this is one of the tricky and frustrating parts of involving them in business, you cannot just dispel them from your life, and not talk to them again.  Well, not my family anyway. I know a lot of families have broken down because of similar incidents, but the way I was raised was to always love and support my family, no matter what.  Call it emotional blackmail, call it what you will, but that kind of sentiment is so hard to live by, especially if your family member has been partly responsible for the demise of your business.  But a lot of other people don’t operate this way, and will inevitably cut ties with their family member.  The point is, mixing business with the wrong or untrustworthy family member, has devastating repercussions.  For three reasons,

(1) the financial and psychological damage that this causes you,

(2) the extraordinary difficulty overcoming this experience psychologically because you are forever linked with family and therefore they will be a constant reminder of the carnage they caused you, and

(3) this type of experience can cause the break down of an entire family, especially when people begin taking sides. And that is the main point I want to make here.  That is, when you have this negative experience in a normal situation, you may lose a business partner or an employee and you can usually move on.  But when it is family, the big risk is that you will lose your bother, sister, cousin, brother or sister in law, parent, etc.  The latter is definitely a lot riskier and therefore a decision not to be made lightly.