Every successful family business is successful in its own way, Tolstoy sort of said. While working with family can be a game of emotional acrobatics, if you’re able to pull it off, the payoff can be huge.
Here’s why: Family businesses are packed with power. They’re responsible for over three out of four jobs in this country, and 64 percent of the national GDP. But staying alive is hard—only 30 percent reach the second generation.
So how are the mom-and-pop (and son-and-daughter) success stories actually written? We talked to Kathryn Hecht and Justin Hill—two business owners who work with their husbands, wives, cousins, and mothers—to get the playbook they follow. They revealed the main drivers of their success, along with the biggest traps to avoid.
Run payroll and benefits with Gusto
Successful family businesses have these 6 things in common
1. They stay in their lanes
The main thing our family experts agree on is that there needs to be a clear division between everyone’s roles. Why? According to Kathryn, “It’s like having two cooks in the kitchen make a single dish. You don’t want that.”
This is particularly important when you’re first setting up shop. When husband-and-wife duo Kathryn and Ryan opened The Clover Theater in Cloverdale, California, they made sure they each had their own swim lane.
At the theater, Ryan is in charge of all the movie programming, concessions stocking, staff scheduling, and HR. Kathryn focuses on communications, handling their social media, newsletter program, and press. She also runs the Alexander Valley Film Society, a nonprofit that often uses the theater as a venue.
Add more definition to your family’s roles by instructing everyone to run through this exercise:
- Outline their daily tasks.
- Use those tasks to write a job description.
- Use that description to craft a title.
- Then, make sure no one else in your family has that same title.
Boundaries are key, says Kathryn. Otherwise, “It’s a waste of effort.”
2. They keep the phone off the dinner table
At Hill Productions & Media Group in Bloomfield, Iowa, Justin works with his mom, wife, and cousin—it’s almost like a mini-family reunion every day. “As our company has grown, we’ve also grown closer and closer,” he says. To keep that momentum going, Justin and his wife Diana have a strict rule: No one can talk about clients before eight in the morning and after seven at night.
Kathryn and her husband enacted a similar rule. “When we have dinner together, the phone stays off the table,” she says.
Here are a few quick ways you can separate work and home like these pros:
- When you get home, set your phone to do-not-disturb mode.
- Post simple sticky notes around the house that remind you what you’re allowed to talk about.
- Agree on a code word to instantly stop each other from talking about work. (The sillier, the better.)
Not taking work home is another must for Kathryn. Even if you love the hustle, be conscious of when and where you’re working so it doesn’t seep into all corners of your life. “We aren’t fully successful in setting up work-free zones,” she says, “but the small steps can do a lot.”
3. They find who is really qualified for open roles
Before shaking your family tree, Justin recommends that you first sift through the talent pool that’s already out there. “Hire who is qualified above all else,” he stresses. “Do the best thing for your business.”
Follow Justin’s four steps to see if the family member you’re thinking about really is perfect for the role:
- Put the job description together.
- Talk to outside candidates who have the right skill sets.
- Run it by the family member who could be a potential fit.
- Interview and hire whoever is qualified—whether that’s your family member or not.
Plus, there’s a bonus to this process. If your family member is selected for the role, they’ll feel like they truly deserve it, rather than having it handed to them.
And finally, be real with yourself. If the person you’re interviewing is high-drama, it may not be wise to bring them on board, Justin cautions. “Chances are, you’re not going to be able to separate that.”
4. They pay their family members just like they were any other employee
“Never work with family because it’s a cheap way to go,” Justin advises. As a business owner, he’s the one who sets his employees’ salaries. His biggest takeaway from signing all the checks?
Justin’s mom, Isle, had a successful career in media before joining Hill Productions. Even though she’s his mom, Justin pays her the same salary he would give to any other employee with her background. “She came to work for me not just because she was my mom. She came to work for me because I recruited her,” he says.
5. They prioritize sensitivity over professionalism
Patience is key when working with the fam. It’s easy to let an ordinary business debate spiral into arguments about who forgot to take out the trash. But our business owners agree—you can prevent those meltdowns.
Justin and his mom have a unique work dynamic since they’ve known each other for, literally, his whole life. “The correction thing, mothers don’t take that very well from children,” he says.
So Justin has had to be extra in tune with his team’s feelings to make it work. Stubbornness can’t exist when you’re trying to get things done, he warns. You need to be okay with saying, “I’m wrong.” When you tame your ego and stay open, says Justin, “It’s a much better dialogue.”
What do you do if you need to give a family member feedback? First, don’t turn it into a game of slings and arrows. Acknowledge their opinion and show them you value it (even if it’s different from yours). To do that, Justin will say things like, “I see what you’re thinking, but let’s look at it from a different direction.”
Then, offer your take. See how they respond. And if you need to make a decision on something, designate one person as the tiebreaker. If you have distinct titles, it will be easy to figure out who should make the final call.
6. They savor the benefits
“Sometimes you’re so in the soup you don’t see the win,” says Kathryn. But working in her own realm has been a hidden way Kathryn and her husband support each other.
If Kathryn has a win at work, she may be too bogged down to notice. That’s why her husband will flag—and celebrate—any quiet milestones that slip past her. This can be pivotal when you’re inundated with all the minute decisions you have to make as a business owner.
Climb out of your work rut by asking a family member to make a list of two things:
- Things that are going well at work.
- Things that need improvement at work.
Then, have them explain why they wrote those points down. Your family member’s fresh outlook will hopefully open up things you may not have seen before.
Kathryn also stresses the importance of “capitalizing” on what working together can offer you. “Ryan and I will watch movies in the mornings, just the two of us,” says Kathryn. The morning of the first Star Wars showing, they were able to squeeze in a screening before the crowds came rushing in—a fun way for them to enjoy the fruits of their labor.
Sure, they don’t give out MBAs for doing business with family. But there’s a tremendous energy that comes from working with the folks who are related to you. And by listening to a few of Kathryn and Justin’s pointers, you can stay more streamlined (and sane) while building a business with your brood.