11 Things To Know Before Hiring A Friend or Family Member

In my post last week on 20 Ways To Bootstrap Your Business, my #19 suggestion to bootstrap your business was to Hire Friends / Family.

A couple of you commented that hiring friends and family was not a great way to go.

YE Blog Reader soo said:

Great article, except I’d have to say that hiring friends and family can be disastrous.  I have a personal policy of not getting any of my friends or family involved in my entrepreneurial efforts.

Hugh from Outsource Survival also commented:

I agree with the other comment… friends and family are dangerous options and should really only be a last resort. If it all goes pearshaped you could be left with no business, no money, and a broken support network when you need it most.

I’ve already discussed why you should hire friends and family (6 Reasons Why You Should Hire Your Friends / Family). Today I wanted to write about how you can make it work if / when you do hire them.

1. Think About Their Personalities

How do you get along with them? It’s easy to be relaxed when everything is going well but have you been through a stressful situation with them? How did they act? Running a business always comes with a set of giant challenges and you’ll need to work well together to get through them. If they stress out, get angry, overreact, and are extremely emotional when faced with problems then they likely are not a good fit for you.

2. Make Sure They Have A “Can Do” Attitude

I’m a big believer in surrounding yourself with people who have a good attitude. It’s your business and you get to pick who you bring on board, so why not get people who support you and make you happy? You’ll need people who believe in themselves and are willing to step outside of their comfort zone. Everyone in a startup business will need to take on additional responsibilities because you never have enough help to go around. If your friend or family member does not have a positive attitude then it’s best to find someone else.

3. Look At Their Skills

Many entrepreneurs tend to surround themselves with people who are like them. This typically leaves a company with big holes in their management team. For example, if you’re a computer programmer, get someone who can do sales and marketing. You don’t need three programmers and nobody selling – that’s a quick recipe for disaster. Don’t bring a friend or family on board because you like them and think they will work hard. Make sure that it makes sense for your business and that you actually need their skills.

4. Keep Communication Open

It’s easy to take a friend or relative for granted and walk all over them. Likewise they might do the same to you! What I’ve always done is set aside time every quarter to talk with everyone on my team (family members included) to ask what they like, don’t like, and what we can do better. I do it on a one to one basis and usually get out of the office. Talking at a coffee shop makes people relax a little more and they’ll tell you the truth. I’ve had to let friends and family members go but it was always a mutual decision and neither party left upset because we kept the communication open.

5. Don’t Make It Only About Money

Sure everyone wants to make money but if money making is the only goal of the friend or family member that you’re thinking of hiring, turn them away. If they care more about money than about your relationship then it will never work. You will constantly be fighting about the direction to take the business and you’ll end up resenting each other. People get greedy when there is money on the table so if you notice a change in the relationship, make sure you bring it up in a discussion before the problem gets too far along. Kill King Kong while he’s still a baby – don’t let the problem get so big that it consumes the company.

6. Identify Who Is The Boss

Somebody at the end of the day needs to be in charge. This should spelled out at the beginning. If you’re hiring someone as an employee then it’s easy – you’re the boss. But if you’re bringing someone in as a partner you need to make clear who is the President and will have the final say over important issues.

7. Treat Them With Respect

This applies to any person who you bring on board in your business and it’s surprising to see how many entrepreneurs treat their employees as verbal punching bags. If you yell at employees, criticize them in front of their peers, and don’t treat them with respect then you deserve to be shunned by them.

8. Let Them Make It Their Own

I give everyone who works for me a personal project that they find interesting and also ties into my business. This can be a useful exercise for a friend or family member who is joining your business but also wants to make their own mark. You can even explore revenue sharing or a bonus system if their personal projects can be tracked against revenue growth.

9. Get It In Writing

Just in case it doesn’t work out you should have everything written down. Give them guidelines as to what your expectations are. Have a clear job description for them. Make sure they understand how much you are going to pay them and when. If they are earning ownership in the business, make it clear how and when they will get their shares. Set goals with them in advance of them joining so they know what they signed up for.

10. Do A Trial

Suggest that your friend or family member comes to work for you for a month. Let them experience what they will be doing on a day to day basis. The excitement of the first week will wear off and they’ll get to really get a feel for what they’re in for. Agree to meet after the month is up and see if it’s still a fit for both of you. This way if it doesn’t work out you’re not carrying someone along for months until the point where you explode, fire them, and say things that you’ll later regret.

11. When In Doubt, There Is No Doubt

This is one of my favorite lines from the Robert DeNiro Movie “Ronin”. If you’re in doubt whether you should hire a friend or family member or not then you already have your answer: don’t do it.

Evan Carmichael

Matthew Toren

Matthew Toren is an Award Winning Author, Serial Entrepreneur, and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Adam. Matthew is co-author of the newly released book:Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs.