Small Family Business Relationships

Looking for advice from other family-owned construction businesses: How do you separate family from employees and create accountability?

We are a small family-owned construction business that I started about 11 years ago. I come from a family of nine kids, plus our parents, and over the years most of us have worked in the company at one point or another.

Building the business from the ground up has taught me a lot—one of the biggest lessons being that family does not always work well together in business, and I can't create a position for or help everyone just because we're related.

Over the years, I've gone through several employees both inside and outside the family, but somehow we always seem to fall back to the same two or three people carrying most of the workload.

I understand that finding good employees is difficult in general, especially in construction, and our industry has its ups and downs. But instead of blaming everything on the labor market, I've been trying to look internally and figure out what problems within our company may be creating bottlenecks or preventing us from growing.

One issue I keep coming back to is the family dynamic.

Our family is extremely close. Most of the nine siblings see each other every few days. We play bar-league sports together, attend birthdays and holidays together, and spend a lot of time around each other outside of work.

Because of that, it can be difficult to maintain the mindset of, "At work, this is my boss—not just my brother or friend."

For the most part, I think we do a decent job separating business from personal life, but it gets complicated when spouses or other family members get involved in discussions about pay, company vehicles, hours, responsibilities, etc.

For example, let's say one of my brothers normally clocks out at 3:30 PM. At 5:00 PM, a customer calls because a breaker was accidentally left off or a jobsite wasn't cleaned up properly. If I call and ask him if he can go back and correct it—and he's being paid for his time—it sometimes creates tension at home. The attitude can become, "You own the company, so anything outside normal hours should be your responsibility."

That's just one example, but it illustrates the larger problem.

I've mentioned that if nobody wants to occasionally volunteer for those situations, then we may eventually need formal on-call rotations, or employees may have to leave company vans at the shop so another person can access the tools and vehicle if needed.

Another challenge is flexibility.

I'm a big family person myself, so I've always tried to be extremely understanding with everyone, whether they're family or not. Doctor appointment? Go. Need to leave early for your kids? No problem. Need personal time during the busy season? I usually try to make it work.

The problem is that I sometimes feel that flexibility becomes expected instead of appreciated.

Then, on the rare occasion where I genuinely can't allow two people to take off at the same time or I need someone to stay and finish something, I get pushback—especially from family employees.

I've also noticed a similar problem with some non-family employees. We've had several good employees who seemed motivated when they started, but after about six months they became comfortable, expectations slowly changed, and accountability became harder.

Pay is another difficult subject.

When I'm negotiating compensation with a sibling, it's hard not to feel like I'm personally controlling their financial situation. If I tell an employee what a position is worth, I'm making a business decision. But when it's your brother or sister, it can feel personal to them—and sometimes to me too.

It becomes even harder because some family members see what we're billing customers and think the difference between the hourly labor rate and their paycheck is pure profit.

They don't always understand everything that comes out of that revenue: payroll taxes, insurance, workers' comp, office staff, estimating time, vehicles, fuel, tools, equipment, warranty work, callbacks, advertising, software, shop expenses, non-billable hours, and hopefully some actual profit left over for the company.

So I've been considering making a major change in how I operate at work.

I'm wondering if I need to redefine myself completely while I'm on the clock—less "brother/friend/family member" and more strictly "owner/boss." Maybe that means discussing very little business outside of work and creating a much clearer separation between our personal relationships and our working relationships.

Before I go that far, I'd really like advice from people who have dealt with this successfully.

For those of you who own family businesses, especially in construction or the trades:

• How do you separate the family relationship from the employee/employer relationship?
• How do you set and negotiate pay scales when employees can see what the company is charging customers?
• How do you explain overhead and company profit without feeling like you have to defend every dollar?
• How do you prevent employees—family or not—from becoming complacent after they've been with you for a while?
• Have you used an outside HR company, consultant, or PEO to handle things like pay structures, policies, reviews, discipline, and employee concerns?
• Could an outside HR person realistically act as a middle ground between employees and ownership so everything doesn't have to come directly through me?

I'm not looking to stop being close with my family. That's one of the most important things in my life.

I'm trying to figure out how to build a professional company with clear accountability without damaging those relationships in the process.

I'd really appreciate hearing from anyone who has been through something similar—what worked, what didn't, and what you would have done differently.