Woman shaking man's hand in office.

When someone initially starts a business, the focus may be on achieving the “American Dream” without much thought of leaving a legacy to future generations who may not be born yet. On the other hand, the family business may have been started with the goal of creating a wealth vehicle for the family for generations to come. At AdviCoach, our business coaches have seen both scenarios at work.

No matter what a founder’s original succession plans were when they started the family business, family businesses evolve and sometimes things turn out differently than the founder expected. Eventually, it may be logical to hire outside the family for senior positions. Often, this makes sense because the family pool lacks the education, experience, or skills necessary to grow the family business, or the company is growing at such a rapid pace, the family isn’t big enough to keep up with the talent demand.

Hiring Non-Family Employees

Our coaches attest that most of the most successful family businesses are made up of family and non-family employees. Often, senior family members have no choice but to hire outside the family because of the failure to do so would hinder growth.

If you’re running a growing family business, eventually you’ll need to reach beyond the family to tap into employee skill sets that are not available within. But for some family businesses, that’s easier said than done. Hiring outsiders and throwing them into the family mix can create rifts if not handled correctly, especially if the non-family employees step into a culture deeply entrenched in nepotism.

Our coaches advise owners of family businesses: “If you want to successfully expand by adding non-family employees, everyone has to be treated equally, regardless if they are related by blood or not.” When non-family employees come on board, it’s time to tighten company policies, have the same expectations for family and non-employees alike, and be extra cautious about treating non-family employees like they’re second-class.

Since so many companies large and small are family businesses, believe us, lots of them face these issues at some point. But when family businesses fail to find and implement workable solutions, it can affect their expansion and bottom line. After all, you can’t have non-family employees feel like they’re inferior, or they’ll leave.

Start With the Family’s Attitude

It’s practical to have a family-owned and operated business when there are only five, ten, or fifteen people in the business, but depending on the size of the family, hiring only relatives becomes unrealistic as the family business grows.

The first thing the family needs to understand is that for the business to grow, the family may need to accept the fact that they have to add non-family members to the executive team. Small business owners: You can only do so much! At first, you may take on the role of marketer, sales, accountant, HR, legal, and so on to save money but eventually, you’ll have to delegate these tasks, especially as the demand for expertise grows.

Our business coaches have noticed that some of our most financially successful clients who own family businesses have hired outside experts to grow their companies, and take them to the next level of success, and we’re not alone.

“Some people can do one thing magnificently, like Michelangelo, and others make things like semiconductors or build 747 airplanes – that type of work requires legions of people. In order to do things well, that can’t be done by one person, you must find extraordinary people.” ~ Steve Jobs

Take This Approach

It may sound wonderful to have a company entirely made up of your children, their spouses, your grandchildren, and your cousins, aunts, and uncles, but is that the right way to grow your business? What if one day, your growing company needs an accountant, a great sales manager, someone trained in human resources, a CEO, a PR professional, a social media guru, or an IT professional, and your family members lack the skills you desperately need? You go outside the family and hire professionals.

The existing family members may still work in the business by leveraging their unique and desirable talents, but if someone from outside the family has the education and experience to do a job better, reaching beyond the family pool may be the best way to expand and grow the company – and that’s not a bad thing!

Remember, the more profitable the family business, the better off the family will be. To learn how to turn your family business into a cash flow engine that is run by family and non-family employees who work as a great team, contact AdviCoach today.