Many self-employed workers and entrepreneurs are now incorporating family members who, due to current circumstances, do not have access to the labor market. What at first might seem like a good idea, can become a serious problem because it is difficult to separate family and work; not to mention that when there is a lot of trust between people who work together, decisions can be made in less professional and more emotional ways. That’s why we recommend that you take into account the following tips when managing a company of this type:

 

  • When selecting or promoting someone close to the family business, it is better to do so with the help of an external technician who provides independence as well as objectivity. Thus the choice will be more in line with the professional needs of the family business, which will avoid problems and duplication of personnel in the future.
  • In the cases in which a couple establishes a family business, one must be careful because a possible separation may also end with the business, so it is advisable to anticipate possible disputes through a family protocol or an agreement. The protocol of a family business addresses not only what to do in cases of divorce, but also what to do in succession processes or incorporation of family members to the company, being able to complement the protocol with marriage agreements that establish what happens with the matrimonial property in cases of divorce.
  • For cases of rivalries between siblings within the family business, we must act with caution because it is one of the most common causes of disappearance in the family business, so it is best to prevent bad health competition clearly delimiting the functions and responsibilities of every brother in the family business. Sometimes the eagerness to lead the family business will force to create several branches. Thus a climate of constructive complementary will be given, instead of one of destructive competition. Even so, it is normal that in all family business there are conflicts between brothers. That is why it is best to establish a code of conduct that sets the procedures for resolving differences.
  • Firefighting is always a difficult act, but in the family business it is much more difficult, because after the process there may be hatred and resentment. Sometimes the economic situation forces the business to have to make that type of decisions, although in rare occasions it is due to the abuse of trust within the family business. Relying on the trust and the emotional bond of the family is the key to face the process with the maximum guarantees but that bitter swallow in the family business should not be delegated to external managers, it should be the responsibility of the family. In the event that the dismissal is motivated by conflicting relatives, the opportunity must be given to correct their behavior or to be relocated to another post where it may be more useful.
Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.