Transitioning from Family Member Based Business
Reprinted with Permission from Stitches Magazine -Published Aug 2013
Written by Steven Freeman
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Q: My decorating business has been doing extremely well, but my “employees” have all been family members helping out. I’m ready to hire my decorating “A-team.” What are the types of positions I should look to hire? What kind of people do I want on my team?
A: You describe a scenario many of your contemporaries have gone or are going through. Speaking for myself I can tell you when I stated my first embroidery company my wife joined me and worked right by my side. As the business (and our marriage) matured it became apparent we would need to change the dynamics. There comes a point where someone needs to be the “boss” and that can be a very difficult role to fill if your employees are also close relatives. This does not mean you can’t have family members as employees in your business but the single most important fact to remember is they have to be treated exactly as you would treat any other employee. That means your wife (brother, sister, mother, whatever) can’t receive special treatment or higher pay just because they are family. Conversely, if things are tight you cannot in good conscious ask a family member to wait a few days for a paycheck.
Once you have made the decision to reach beyond your family for employees you should ask yourself a few questions in order to find the right people. For example:
1. What roles in the business might be better suited for an employee other than me?
For me, I do not enjoy the type of sales building that requires cold call prospecting for new business. Because of this one of the first roles I filled in my company was a professional sales person. The gentleman I hired was much better at this type of sales building than me. Because he was good at this the company had increased revenue, he was able to make a good living and I was happy because I did not have to fill a role I didn’t enjoy. It was a win/win for everyone.
As your business grows you will be able to hire people to fill jobs you once had to do yourself. Fill the roles that make the most sense for you. . If you love Customer Service but hate bookkeeping, hire a bookkeeper and keep working closely with your customers. Even as a small business you need to consider yourself the CEO of your enterprise. The CEO delegates responsibilities in her organization to the people best suited for those roles. You need to do the exact same thing.
2. What is the most effective use of my time?
Since commercial embroidery is a field where creativity and necessity (left brain vs. right brain) can clash it is important you understand that even though you might enjoy running the machines or digitizing a logo there might be a better use of your time. You need to find employees who will handle the production related aspects of your business so you can focus on business development. As the leader of the organization you need to stay involved in the creative process while delegating day to day production tasks to employees.
3. What kind of people do I want on my team?
You want to work with people who are honest, hardworking and reliable. I understand that is readily apparent but it is not always easy to find that person. Depending on the role it may or not be important how the person presents themselves at an interview. What is important for you to understand is through a careful interview process you need to determine if this is a person you can spend as much (or more) time with than the people you call family. You need to ask applicants probing questions while being careful not to violate any laws regarding discrimination. Additionally, you need to understand the type of person who can run an embroidery machine, digitize a design or create and evaluate business analytics is almost never the same person. Again, this seems obvious but sometimes in smaller organization we try to get the most bang for the buck we can.
Making the transition from family based business to employees found through traditional recruiting can be very tricky. With family members you already know your family as “people” and you don’t have to ask questions like, how old are you? Are you married? Do you have children? What is your religion? While the answers to those questions might be important to you (on a personal level) it is against the law to ask this of a potential employee. Because of this you have to become detached from the emotional side of the equation and be prepared to hire purely on how a person will best meet the needs of you and your organization.