Keeping Family “Out” of the Family Business

The parents in a family business usually encourage their children to join the family business at an early age. The pitch to join the business can be as active as a full court press or as passive as a passing mention. When they finally decide to join, the parents are usually thrilled that their children are following them in their footsteps.

But what happens when you don’t want them to join?

Some reasons you may not want your children to join the family business:

Sibling conflict

If they don’t get along in their personal lives why would it be any different in a business setting? Need I say more?

Creating Conflict

What happens when the children do get along in their personal life, but have to work alongside each other, or even worse work for each other. I worked alongside my older brother amicably, but there was the future speculation of who would become the future CEO when our parents eventually retired. Fortunately we eventually brought in an interim outside CEO and it never became an issue.

Extended Family

Inviting in-laws and cousins rarely works. Why even go there. I supervised my sister-in-law in our family business. It worked well, but was awkward to conduct performance reviews.

Employer of Last Resort

A child may have trouble keeping a job and may decide to join the family business for all the wrong reasons. They may not be genuinely interested, but it’s the easiest career path. Try to be objective and ask yourself are they qualified and interested in the family business? Would you hire them if their last name was different from yours?

Ask Yourself a Few Questions:

  1. Are you inviting them to join for your satisfaction or theirs?
  2. Is the business better off with them or without them?
  3. How strong are sibling relationships and can they withstand the pressure?
  4. Can you choose between children for promotions, increased responsibility and different compensation?
  5. Will these decisions harm your relationship with them or between them?
  6. Are you capable of terminating a family member if it doesn’t work out?

Discouraging Children to Join

If you are having difficulty with these questions, you may want to “discourage” rather than “encourage” your children from entering the family business. One method is to depict the family business more accurately to your children. Parents sometimes sugar coat the family business experience to entice their children to join. Allowing them to see both sides, including the potential conflict, can help to discourage them before even having the discussion. My younger brother (4th youngest sibling) never joined the family business, partly because he wanted to do something different on his own, felt there were already too many of us involved, but he also saw how “demanding the business can be on the family members relationships”. Talking about sugar coating a phrase.

As difficult as this may seem to resist inviting family members to join the business, in the long run it can help keep family relationships intact.

Which is more Important to you?