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Your Small Business – Considerations for Hiring a Friend or Family Member

As a small business owner, at some point you’ll undoubtedly be approached to hire a friend or relative.

Before you consider bringing aboard neighbor Big Joe, sister-in-law Missy, Cousin Sheila or friend of Cousin Sheila – you need to give this sensitive issue the priority it deserves.

Whether you’re considering hiring from this group because they’re desperate for a job, or because you’re desperate to hire someone you know or know of – hiring friends or family isn’t for the faint of heart. Frankly, it can be a challenge, as few other business decisions have as much potential for conflict.

However, hiring from the family and friends pool isn’t automatically a bad thing. Small business experts agree that if proceeding into this potential problematic area, you must be forearmed with a consistent set of policies and procedures. These would be for all employees – including friends and family members.

Whether you’re running a catering business, opening a pizza place, deli or restaurant, becoming a tax preparer, selling jams, doing home healthcare or computer repair, opening a consignment shop, becoming a florist or wedding planner, doing house cleaning, meal delivery or pet sitting… if hiring friends or family you need to be thorough. Stick to a game plan and it’ll work for your small business… as well as neighbor Big Joe and Cousin Sheila.

Here are a few guidelines to consider:

Make clear – if hiring nephew Billy, you need to decide how he will address you. Will he call you “uncle,” or what the other employees call you?

Make aware – before hiring “Lady Killer” Mike, your old college roomie as the new Sales Director, will employee morale suffer as a result?

Make written – the requirements to work in your business should be the same for all employees, regardless of their relationship to you. Also, it’s key to first have a description for each job, and you should create it for the position and not the person.

Make report – experts recommend that family and friends should always report to someone other than you. This allows for more objective feedback and supervision.

Make pay – salaries should all be based on company pay ranges for each role, or fair market value. Avoid any perception of preferential treatment regarding compensation.

Make issue – it could be an issue for your employees if at the top of each department is a friend or family member. Employees might wonder how they will advance if “Lady Killer” Mike or sister-in-law Missy is in front of them.

Make real – be a realist before the fact. That is, ask yourself beforehand how you are going to deal with Cousin Sheila or friend of Cousin Sheila if it doesn’t work out.

The results of hiring friends or family can go either way… boon or bust. It all depends on how you manage the connections and the rules you have in place.

There is no guaranteed, easy-to-follow blueprint but having a plan and sticking to it is vital for business and relationship success.

Good luck!


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