Our economy somewhat relies on family-owned businesses, and they are a vital part of our culture. With 111 firms worth $839 billion in total market capitalization, India ranks third internationally in terms of the number of family-owned businesses. The majority of businesses begin with an idea that someone has and the passion and commitment to make it a reality.


As a firm gains traction and success, it becomes necessary to seek the assistance of others to assist with its operations. In this delicate stage of a business start-up, selecting someone with a passion for the business and who is trustworthy is a task. This is when an entrepreneur may seek the assistance of a family member.


Of course, they can trust their family, and they can trust that their family would work as hard as they do and be as dedicated to the business’s goals.


Issues and conflicts can emerge when family members get involved in the operations of a business. It can also have an influence on the organization’s long-term health if there isn’t solid governance and efficient leadership practices. Not to mention the importance of familial ties.  This is especially problematic when business owners feel obligated to hire relatives who may or may not be suitable for the position.


The fascinating thing about this family business model is that some of them are quite successful and those who allow these ties to have a detrimental influence on the company’s health and well-being. When it comes to hiring family members, there are a few things that business owners can do to make the employment relationship work.


5 Points to Consider When Managing a Family Business



  • Hire the right person for the right job



Many family-owned firms make the mistake of pushing a family member into a job for which they lack the desire, skills, or interest. Typically, this model does not function. 

Job opportunities should be filled with persons who have the necessary credentials, competence, and record of success.



  • Make Expectations Clear



To guarantee a good work experience, always explain job expectations at the start of the employment relationship. All workers (regardless of their relation) must be aware of what is expected of them and the repercussions of failing to achieve those expectations.

When the employee is first employed, this should be done, and then there should be continuous discussions throughout the work term.


  • Getting to Know the Company



There is a definite culture in any firm, big or small, and new workers should be provided a new employee orientation and knowledge on the “unwritten” laws of the workplace. Assist the employee in understanding workplace conventions, dos and don’ts, and cultural expectations, for example. This will get the individual ready for a successful job.



  • Create a system for evaluating and managing employee performance



Create an employee performance management process and incorporate it into all business operations. To evaluate employee performance, use objective data. Create job descriptions and employee goals that are aligned with the company’s goals to help the process forward.

If family members fail to fulfill performance goals, they should be treated just like any other employee. These family workers should be moved out if their performance does not improve, regardless of whether they have the same last name as the owner.



  • Choose Wisely and make the tough call



Sometimes you have to make the difficult decision to prioritise business goals above family connections. This can be tough, but it is necessary for the company’s long-term success.

Just because you feel obligated to carry the deadweight of your underperforming family members, business owners should never abandon the organization’s goal.


It’s challenging enough to start a business without the extra difficulties and burden of family connections. Family businesses, on the other hand, have a number of distinct benefits over other types of businesses, chief among them is a devoted group of individuals willing to support your efforts. If you’re starting a family business, you’ll need to take extra precautions to avoid burnout, maintain workplace harmony, and seek advice from professionals outside the family.