Business · Friends and Family

Would you hire family members and/or a significant other to join your established start-up?

Anonymous

February 26th, 2016

If you have an established start-up (a successful 2.5-5 years), would you hire family members to work in your company? Would you hire your life partner or spouse to work for you too?
A colleague had discussed about how some people should be a power couple by working together. I know that just as some people work out romantically, doesn't mean that they will work out professionally.

John Seiffer Business Advisor to growing companies

February 26th, 2016

Hiring family members (yours or those of other employees) is a slightly different decision as to whether you as owner should work with your life partner / spouse. 

As for the spouse thing - when it works it works well. My spouse and I can't work together so we co-own the company but don't really work together on it outside of some strategic discussions from time to time. But I have seen it work with clients and others I know. You do need clear division of labor and division of work time vs personal time.

Certainly don't do it to fix or cover over any problems in the relationship. I know of one couple who started a business together, got divorced and kept on as business partners. Go figure. 

Also I would test it for 3 months - assuming you'll abandon it after 3 months unless it's going amazingly well. As Manu said, don't hire anyone you can't fire. But if you discuss it before hiring as a trial you can fire your spouse. 

With other family members I try not to do anything at work that will make it awkward for a holiday dinner at home. A lot of that is how you set expectations. On the plus side, I've seen family companies generate considerable wealth and well being over many generations. 

The Little Red Book of Family Business by David Bork is one resource I've seen recommended (not read it myself). 

EdG

February 26th, 2016

If you really want to hire family/significant others, there is only rule to follow (which I learned from grandfather whose business is now the largest feed company in Belgium) if you want to hire family/significant others:

Appoint a general manager that is not from the family, and each family member that starts will NOT be managed by another family member.

Follow this and it will work.

Adam Arthur Atom Creative Corp, DevShare and infoATM

February 26th, 2016

NO, No, no and NO!!! 

This works for some people, but in most cases it is a disaster.  I've hired family and friends, and now I have a strict policy of never hiring someone I'm related to or non-work friends with.

When you're working with someone, especially in a potentially risky venture, it's going to get stressful.  As humans, it's not easy to just 'turn off' the negative emotions that can be generated by stressful and difficult situations.  You run the risk of damaging your personal relationships.  You are much better off hiring people based exclusively on that person being the absolute best person you can find for the job.

Manu Chatterjee CEO at Moodwire

February 26th, 2016

It can work but as a general rule:

Don't hire anyone you can't fire.  

There are so many complications that can happen such as reactions from others in the business, appearance of favoritism (whether true or not), and that is before we get into whether you can really separate personal feelings from business responsibilities.  Its not that it can never work and if the person is just an intern or temp, or has some obvious unique skill then it may be OK.  But in general be very cautious!

Good luck!

David Still Founder of Start-ups, Entrepreneur, Financier and Advisor

February 26th, 2016

Rule #1 in business is to never do business with family members or friends. Over 40+ years I have never seen it work out well.

Jim Reich Entrepreneur, engineer and inventor

February 26th, 2016

I've done it, and it can be great -- I worked with my wife for 5 years at a startup. The highs of startup life were higher, and at the low points, we were much better able to support each other than when we've been at different companies.

There is a scary moment the first time you do this -- is my spouse actually as good as I think she is? What happens if she actually sucks? This would be a huge problem in a marriage, respect is super-important. But we were already fairly confident, so we took the plunge.

The good/bad part is that you do wind up spending more time working -- dinner conversation and work sometimes get pretty blended. But at a startup, the pedal is pretty much all the way down anyway, and the same endless work hours that can become a real marital problem in a startup without her, were perfectly acceptable and more fun with her.

Some caveats: your spouse can't report to you. You have to work extra hard to avoid apparent favoritism, which is tricky if your spouse turns out to be a star at the company, or if there are political battles-- we tended to agree, since we're philosophically pretty well aligned, but had to make it really clear that it's consistent philosophy, not personal. 

I'm skeptical that this would work for family members other than a spouse. Many of the benefits I'm talking about are pretty specific to a spouse, but the risks seem to apply to any family members.

Phillip Cohen President, Cohen Architectural Woodworking

February 27th, 2016

It's neither right or wrong. 
We're a family business, started in 1982. My wife, three adult sons, and an adult daughter are all owners. Two other children work as employees.
We're a healthy, growing national company. The other 65+ non-family employees love our culture. We're currently an employer of choice in our community and industry.
It's more about facing and solving the problems as they come up. 
It's also important to establish who's in charge in advance.
I like to quote Andy Stanley, "In every situation, ask yourself, 'What would a great leader do?'" 

Samie Syed

February 26th, 2016

Depends on your relationship with them. But generally, no.

If you and your family member have a falling out, it will be hard to not use their personal life against them. Similarly and naturally, you will expect more from them, so if they decide to move on, the whole issue of 'family loyalty' comes into play.

I come from a pretty entrepreneurial family where mixing family and business has caused many problems.

Frank Cohen CTO and Founder at Appvance

February 26th, 2016

If you can deal well with defensiveness, jealousy, and putting your hopes and fears into a business conversation, then hire them. Otherwise, hire someone to manage them.

Mitchell Bolnick Business Mentor, Adviser, Consultant for Start-ups, Small Businesses, Growing Businesses

February 26th, 2016

No, short and simple. *Regards,* *Mitch Bolnick* *We Help Your Business Excel!* *602-686-0641* *Principal* *The Excel Consulting Group* *http://excelgroupsolutions.com/ * mitchell.bolnick@gmail.com *Business Development* *Bonsap LLCNNN Lease Investors* mitchbolnick@bonsap.com www.bonsap.com www.nnnleaseinvestors.com *Eliances Subject Matter Expert* www.eliances.com *Caliber Realty I Commercial +* www.CCREplus.com