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The Challenges And Opportunities Of ‘Family’ In A Family-Owned Business

The phrase “Family Owned and Operated” creates a warm flow of positive emotions when you talk about your company to your customers, especially your female customers. But having family as a part of your business creates a whole new dynamic of which most people are unaware.

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By Vic Tarasik, owner, Vic’s Precision Automotive

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The phrase “Family Owned and Operated” creates a warm flow of positive emotions when you talk about your company to your customers, especially your female customers. But having family as a part of your business creates a whole new dynamic of which most people are unaware.

Navigating the family in a family-run business can be a bit like taking a boat to Alaska’s ­Aleutian Islands as the ice flow begins to break in the Spring. Make a turn in the wrong ­direction and you have a disaster on your hands and, in some cases, you may never be heard from again.

Business management advisors are typically separated into two camps regarding this topic.

In the first camp, my Bottom-Line Impact Group coach, John Wafler, has two rules when it comes to hiring family to work in your business:

#1. Never hire family,
#2. Refer back to rule #1. 

Over the years, he’s seen many shops with family working for the owner and, in most cases, they did not work out. So his advice has merit based on experience; I only wish I had listened when he coached me not to hire family (more on that later).

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In the other camp, Rick Schissler, a Silver Fox Advisor, says that there is nothing like working with family. He also speaks from experience, being a part of a family-run company for most of his career. Working for his father and grandfather, they knew on a daily basis what was expected from each other and created a work environment that was conducive to success.

Benefits Of Family
There are some key benefits of having a family member work for you. First, you know if they padded their resume and whether they went to college or not. You know their talents and skill sets and, in most cases, their temperament. The background check needs to go only as far as the next family ­gathering.

In the auto repair industry, trust is the cornerstone of our service promise, and the stronger the trust factor is at your shop the more effective your service promise will be. So having a trusted family member can help you to reinforce that value-added component of your business. Also, in many cases, family will work odd hours and, in some cases, accept a lesser wage because they know you and look at the big picture as it relates to helping meet the shop’s goals and objectives. This can be helpful in company startups or during slow times.

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The Challenges Of Family
Some family members feel entitled because you are their brother or sister, and when you aren’t around will use that card with customers, vendors and employees.

They may not follow all of the company guidelines you have in your employee handbook. They know that you will give them leeway and treat them differently because they are “family.” But, if you don’t think your employees are taking note, think again. They are, and if you are not careful you may lose a valued team member because you don’t let them do the same. Even worse, you could be called on the carpet for discrimination by your ­government agency.

Family knows how to push your buttons. While you may be the owner of the company, you can still be viewed as the son, daughter or younger sibling. And that distinct pecking order that was evident while you were growing up can show up again, even though that person is ­employed by You!

One of the biggest challenges though can come from separation, ­either by their resignation or you terminating them. How do you think your next Christmas dinner will go over when your brother-in-law is sitting across the table from you after you fired him a few weeks earlier? Is hiring a family member worth the hurt feelings?

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If you do decide to bring on a ­family member, make crystal clear your expectations up front and express that at work you both wear the employer/employee hat and at the end of the day you put on the family hat.
Hold them to a higher standard than the rest of your employees, this way no one will be tempted to feel entitled and your employees will feel that you are using the same measuring stick to judge their performance.

My Personal Experience On Hiring Family

After the economic meltdown in 2008, I had some family members who fell on really hard times and lost everything — their business, their home, etc. Concurrently, things were booming in Houston, the shop was doing well and we were having a great time at the company. So, we helped them out and gave one of them a job at Vic’s, which was against the advice of my business coach.

At first, things worked well as this family member went to work and rose in responsibility, moving from lube tech, to service advisor and eventually to assistant manager. My loyalty to him prevented me from seeing or realizing what was actually going on. Morale began to suffer and car count fell, but the average RO dollars went up to cover for the lost revenue from car count. Employee and customer satisfaction was falling in the process of me turning over some of the ­responsibilities to him.

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In attempting to find out the source of the issue, I turned over every rock except one, which was to look hard into this family member’s performance. I did inquire to customers and employees, but they all said, “things were just fine.” What I know now was that the employees were afraid they would lose their jobs if they came forward with information about the family member, and my customers did not want to hurt my feelings.

Bottom line. Nepotism can, and will, kill a company if you’re not careful. I didn’t think I was guilty of letting this happen, but I was.

A short while ago, the assistant manager and I separated, and while I would like to say it was amicable, it wasn’t. The upside, though, is the RO count is increasing, the average dollars per RO is holding, customers are returning and my employees are happier than I’ve seen them in a long time.

My longest-term employee, Lawney, put it to me this way the other day. He said, “I’m having the time of my life and haven’t been happier here!” That sealed my decision, as he was integral to the shop before and after family arrived. The downside, though, is that a 40-year-old family relationship has been laid to rest.

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So my lessons learned are this: If you are thinking about hiring family, make sure you do what I didn’t.

Here is the short list.
• Set very specific guidelines to which you hold that person accountable.
• Review performance benchmarks that are within their responsibility on a weekly basis.
• Take action as soon as you ­suspect something is wrong.
• View failures as the opportunity to coach.
• If you find they are unwilling to follow your guidelines, terminate them right away. Failure to take action will cause more damage from which you may not recover.
• If you are going to promote that person to a position of responsibility, make sure they are doubly qualified so it does not appear you are putting them in that role because they are family.

Even though I’ve shared a negative experience, there are many positive stories of families successfully working together in our field. If you have a story to tell, please share it with us at Shop Owner ­magazine. 

Vic Tarasik is the owner of Vic’s Precision Automotive, The Woodlands, TX, a 30-year
industry veteran and long-time 20 Group member. His 10-bay, 7,000 sq.-ft. shop specializes in customer service, in addition to expert vehicle repairs. Vic can be reached at [email protected].

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