What 'Family-Owned and Operated' Really Entails

What ‘Family-Owned and Operated’ Really Entails

Having family as a part of your business creates a whole new dynamic that most people can’t comprehend.

The phrase “Family Owned and Operated” creates a warm flow of positive emotions when you talk about your company to your customers, especially those of the female persuasion. But, having family as a part of your business creates a whole new dynamic that most people can’t comprehend.

Think getting through Thanksgiving Dinner is tough? No matter how dry the turkey, how political the conversation or how one-sided the football game is, complaints about your cooking pale in comparison to the smorgasbord of challenges awaiting you every day you unlock the door of a family business.

In the first camp, some of my fellow business coaches and I approach the  volatile topic of hiring family to work in your business with the following list of rules:

  • Rule #1. Never hire family.
  • Rule #2. Refer back to Rule #1.  

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

Of course, not everyone agrees with us. In the other camp, Rick Schissler, a Silver Fox Advisor, says that there is nothing better than 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

Let’s start by admitting that 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.

The Challenges Of Family

In some cases, of course, it’s not so easy. Some family members feel entitled because you are related, and when you aren’t around will use that card with customers, vendors and employees.

They may not think they have to follow all of the company policies everyone else does because you’ll 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 of the difference in policy enforcement. Even worse, you could be called on the carpet for discrimination by worker support agencies.

Family knows how to push your buttons – they grew up doing it! 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 through termination. 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?

If you do decide to bring on a family member, make your expectations clear 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. Let them know they’ll likely be held to a higher standard than the rest of your employees, so 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 Family Scrapbook

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, my shop was doing well and we were having a great time at the company. So, against the advice of my business coach, I decided to help out and gave one of them a job.

At first, things worked well. This relative got to work and rose in responsibility, moving from lube tech to service advisor and eventually to assistant manager. However, things weren’t as rosy as they appeared. Morale began to suffer and car count fell, though the average RO dollars went up to cover some of the lost revenue from car count. It turns out that employee and customer satisfaction was falling in the process of me turning over some of the responsibilities to him. My loyalty to him, though, had prevented me from recognizing what was actually going on.

In attempting to find out the source of the issue, I turned over every rock except one, which was to look hard into my family member’s performance. I did ask customers and employees how things were, but all they said was, “things were just fine.” What I eventually learned was that employees were afraid they would lose their jobs if they came forward with their concerns, 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.

I finally got the point and I let my assistant manager go. While I would like to say it was an amicable parting, it wasn’t. The upside, though, is the car count soon increased, the average dollars per RO held, customers came back and my employees became happier than I had seen them in a
long time.

My longest-term employee, Lawney, put it to me this way when the dust finally settled. “I’m having the time of my life and have never been happier here!” he said. That reassured me that my decision was correct, as he was integral to the shop before family got involved – and he would remain so after. The downside, though, was the collapse of a 40-year-old family relationship.

The lessons I learned were painful, but important. If you are thinking about hiring family, make sure you do what I didn’t:

  • 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 an 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 mine was a negative experience, there are many positive stories of families successfully working together in our field. If you have one of either to share, please let us know. There may be some turkeys, but feast or famine, we’ll always have “pumpkin” to talk about.

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