Should You Have Family Members Working for You?

When you start a small business on your own, it may be, by its very nature, a family business. That is because you have no outside business partners or other investors to consider. You have probably used family resources to get it started. This may be your adventure, but your family will be deeply connected. Certainly, at least financially. But should you have family members helping you as employees?

For many small businesses the answer is an unequivocal yes. Depending on the type and nature of your business you may want family members to help with bookkeeping, handing out flyers or even selling. You’ll want them supporting you on social media and perhaps with their own personal skills. But the real question is, should you hire and pay them as an employee? It can get tricky.

First, you may be able to hire a family member for less money than a comparably experienced outsider. They may work for less because they are a relative. The problem is they may treat their job this way. They may not give it full effort, justifying it by their “discounted” salary. Boy, can that get messy. Especially if you were expecting the opposite. The lesson here may be if you need specific experience or expertise, look outside your family.

Hiring a family member as a salesperson can be a no-brainer. They know you and your product or services.and they can be paid according to their performance. If they sell, they earn, if not, you hire additional sales people. Sales is the great equalizer in business.

If you are hiring for other positions, you should probably pay no less or no more, for a family member to work for you than an outside candidate. This provides an opportunity for family members to become a part of your organization, but doesn’t give them an advantage. This will prove to be important for the self-esteem of the family member should your company grow and minimize hard feelings of other employees.

The fact is when you are starting a business, you want all the help you can get. That frequently will come from family members. Of course, you should accept their help, but when it comes to making them an employee, think ahead.

When building your business you should start at least, with a small business insurance plan to protect your investment and efforts. Our independent agents offer a variety of customized plans that can get you started. Contact us for a no obligation quote today.