3 Tips for Small Business Owners Who Employ Friends and Family

3 tips for small business owners who employ friends and family.

Small business owners who choose to hire friends and family as their subordinates are often surprised by the conflicts of interest and emotional stress these employments can produce. Below are three tips from WP SiteKit for small business owners who wish to translate their friendships and familial bonds into good working relationships without creating unnecessary conflict or hurt feelings.

1. Take the Uncertainty Out of Payroll with Automation

According to Reader’s Digest, money and friendships can be a tricky combination. Instead of operating without contracts, payment agreements, or other financial arrangements because of your prior bond with your new employees, treat them as you would any other new hires and ask them to fill out the necessary legal paperwork. Enroll all employees in an organized, automated payroll program and take the guesswork out of the equation for all parties by ensuring direct deposit payment.

In order to keep your employees happy by paying on time, consider using either a full-service automated payroll system that includes HR support for a larger company or a payroll template created specifically for businesses with a small staff. Depending on the type you choose, these templates can also track your employees’ work hours, keep them updated with schedule changes, and automatically catalog invoices so you don’t have to. Creating and maintaining a professional system, even if you’re working with your best friends, can legitimize your business relationship with these individuals and take the potential misunderstandings out of your payment plan.

2. Prioritize Clear Communication

It’s crucial to establish the fact that you and your new employees have different roles in the business — especially if you are the owner. Depending on how much is at stake both financially and personally, you may want to hire a lawyer, draw up an employee contract, and put their terms of employment in writing before they start working for you.

Take into account previous issues as well. For example, you may have previously hired your sister to build your website, but she turned in work late and did not understand the boundaries between your business and personal lives. This time around it could be better to outsource projects such as web design or content creation to others to preserve that personal relationship.

3. Develop Relationships Outside of Your Small Business

Try to make other friends and connections outside of your small business. Avoid becoming an insular unit with only your best friends or family if they are the ones who comprise the heart of your business operations.

Consider reaching out to other businesses in town, whether through the chamber of commerce, a minority-owned business league, or another organization that can support your efforts, provide you with learning opportunities, and help you grow your network. Joining your local chamber of commerce may offer business discounts, give you access to specialized training, and help you and your new employees develop business relationships with other local people with similar goals. Though the tips above outline a few cautionary situations, bringing on a friend to create a website or employing your uncle to manage your inventory is not necessarily a recipe for disaster. When you follow guidelines to ensure that you pay your employees correctly and on time, communicate clearly, and prioritize every employee’s contribution to the company, you are setting your relationships and your small business up for a long run of success.

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