Nepotism in Small Closely Held Businesses

By: A Staff Writer

Updated on: Oct 25, 2024

Family Biz = Blessing or Curse? 🤔

Mixing family and business can be great, or a recipe for disaster. How to navigate this tricky terrain.

• Clear Roles & Expectations: Even (especially!) for family, to avoid accusations of favoritism from non-family staff.
• Performance Reviews are NON-Negotiable: Holding family members accountable is hard, but essential for long-term success.
• Fair =/= Equal: Compensation based on market rates, contribution, to avoid resentment building up.
• Outside Advisors: A neutral third party (board member, consultant) can help settle sticky family disputes.
• Open Communication: Address tensions early, don’t let them fester under the surface and poison the workplace.
• Succession Gets Tricky: Is the biz truly designed to pass down, or is an outright sale better for everyone?

Family businesses can be amazing, but require extra effort to manage dynamics fairly and effectively.