21 Days of Capitalism – Day 8 – Family and Friends Staffing

Michelle LaBrosse, PMP

In the business start up mode most entrepreneurs work with whomever is closest to them. This often means having family members and close friends helping in various roles in the business.   As business evolves, you quickly develop the need to use different approaches with people who have more specialized skills.  But this does not necessarily mean you have to get rid of the family members and close friends who helped you get past the infant mortality stage of your business.   As the business grows, the top talent who helped in the early stages can take on more of a training and mentoring role with new hires – IF they are flexible enough to change with the various stages of growth.   When the “old guard” can’t and won’t adapt , off boarding enables the natural progression of the business.

The way to maneuver this very delicate situation is to set it up right from the get go.   I have found whenever family members and close friends get involved in the business to have a clear path for their involvement.     This helps in two ways – first no one wants to sign on for a life sentence to help you pursue your dreams.   They have their own dreams.  Even in an established business, it is helpful to use your established business as a launching off zone for their dreams.  In any situation though, a start up or an established business, I have found it helpful to evaluate over several years (not weeks or months) the formation of legal partnerships – at least in my experience it is those partnerships formed after years knowing and working with someone that last – ESPECIALLY with friends and family.    Limit the time for employment to as long as it is creating value for both parties – putting a time limit on their help of six months to a year can help as well.   Make it a part of the dialog about creating the processes required to run the business as it grows with people who have been professionally trained to run those processes.   The family and friends can most certainly become the professionally trained staff too – when they are willing to get the appropriate professional training.

My brother a CPA gave me very wise counsel in the early days of my business.   First he told me right out – while he would be happy being an advisor and help me find the right talent to help with my accounting and finance parts of the business, he was in no way available or qualified to help with the day to day of the business.   Second he told me that “cheap” accounting cost far more than good accounting and it was better to spend just a little more on better accountants.   This I see in others business one of the biggest failings – thinking you can do your own books with products such as quick books or let someone in your family do the books.   Professionally trained book keepers and accountants can mean the difference between success and failure of a small business.   A good book keeper and an accountant can actually help you make a lot more money – they are not a cost center, they are profit centers.

Accounting is the most common area of the business where I see the family and friends staffing the hardest to change.   And the most in need of adopting more professional approaches the soonest.   Viable businesses need professional bookkeepers and accountants.  I have found other areas of the business a bit easier to transition away from early reliance on family and friend talent.

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