Why You Should Hire Family Last Instead of First?

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In This Episode

Unfortunately many folks starting out in business make the often fatal mistake of hiring family and friends first instead of last.  Now this may seem counterintuitive to many folks, especially those who know us well since we usually espouse the importance of Know Like Trust when building your business.  But just because it might be “easier” to start with family and friends, doesn’t mean it’s the best thing for your business.

It usually starts out innocently enough where you reach out to your sibling or cousin or friend to help you out with something in the early stage of your business.  Perhaps it’s help with doing some production or making a delivery.  Maybe that family member has certain skills when it comes to sales.  Or they could be really good with numbers so you have them start doing the books.  Whatever it is, you get them involved at a very early stage when you don’t know any better.  When you don’t fully appreciate what it is that you don’t know.

We shared several stories on the show today including some folks who went decades before hiring anyone who wasn’t family.  While those family members might have helped with jumpstarting the business early on, it became obvious later on just how those same family members were limiting the growth of the business.  And those limitations weren’t coming from simply running out of family members to hire!  It had more to do with how those family members didn’t have the particular skills and experience needed to help the business grow and take the next step.

It’s natural for a business as it grows that it will outgrow certain people in the business.  Some folks just top out faster than others.  When this happens, you as a business owner need to move on from those people to bring in more experienced people.  When the person you’ve outgrown is a family member it is a discussion that is often avoided.  In fact, business owners often try to find a place for this outgrown family in the business instead of moving on because they don’t want to hurt feelings or have to deal with the repercussions on a personal/family level.  As you can appreciate, things can get pretty messy with family.

One of the reasons we say you should hire family last is that it puts the family member you’re hiring in a difficult position.  If they are hired, it’s usually assumed that they were hired because of their relationship to the owner vs. being hired based on their qualifications.  We guide our clients to make sure if they are going to hire family or friends that they make sure that person is overqualified for the position so that people won’t have those reservations about this person coming on board.  That’s an easier thing to do once the company is a bit established and you as the owner appreciate what you don’t know!

 

People, Companies and Resources We Mentioned in the Show

 

Join Us Next Time

Join us next week when we chat about perhaps one of the most intimidating things for a business owner.  Dealing with your banker.  We will provide some insights for how to approach your banker with confidence and form a relationship that will benefit both of you.

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