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Managing Families In Business
By Dan Goldberg


It seems like a good idea at first. You start a business and it begins to grow.

Before you know it, you have to hire someone to help you manage your company. During times of economic uncertainty and/or recovery, many people feel more comfortable hiring a family member, spouse, child, sibling, aunt, uncle or some other relative. The growth continues and you add an employee and then another one. Each new-hire is another family member, either through blood or marriage. Before you know it most of your upper management team is related to you in one way or another.

This scenario is a common occurrence. Of course, as the business grows, most of the non-management team tends to be un-related folks who come aboard as line or middle echelon employees.

Eventually you are faced with decisions that can create problems for your business and worse, for your family. With growth comes added responsibility for your family member employees. With added responsibility come new positions (either by title or accountability). Who gets promoted and how do you do it, who becomes the heir apparent to your position, and who gets what amount of shares and when. All these factors have to be handled in such a way so as to avoid family friction, or at least keep it to a minimum.

The first rule is: never promise anyone anything of major significance, until you have time to assess his or her capabilities. You may even want to frame this statute and hang it somewhere in your office.

This is a tough declaration, especially when dealing with family. Items of major significance include such things as: ascension to a higher position, numbers of shares in the company, considerable pay raises, and larger benefit packages. The tendency for most people is to want their family members to feel comfortable and happy as part of the organization. Therefore, most owners tend to overcompensate or compensate too early in the company

Dan Goldberg is an internationally recognized speaker, trainer, coach, business developer and management consultant. Reach Dan by phone: 215-233-5352 ; email : ; or visit :

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