SME owners are split on whether to keep their businesses as a family affair or not, according to new research by small business lender iwoca.
Just two in five (41%) SME owners say they would give a job to a family member if they asked – by contrast, nearly one in three (30%) said they would not employ a relative.
This split reflects current small business arrangements – just over half (54%) of small business owners say they do not work with family in any capacity. Of those who do work with family, one in four (26%) small business owners works with their partner and one in twelve (8%) works with their child.
Steptoe and Son or Succession?
Those who choose not to work with family are clear on why: two in five (39%) small business owners report wanting to keep family and business life separate.
One in ten (11%) say they want their family to forge their own path – indeed, more than a third (35%) of SME owners surveyed say it is unlikely that their children would join their business. Interestingly, a tenth (10%) believe their relatives can find a better career outside of their industry.
Improving family bonds
Despite a minority of SME owners employing relatives, those who do work with family members see it as a positive. Almost two thirds (64%) of SMEs report that working with their relatives had a positive impact upon their relationships, with only a small fraction (7%) of SME owners reporting a negative impact.
Those small business owners who do work with their family cite trust as a significant positive, with a quarter (25%) saying that they trust family members to do a better job than a stranger.
Seema Desai, COO at iwoca added, “For some, working with family members could be one of the best decisions they ever make, but, of course, it won’t work for all. Try to make an objective assessment about what your family member can add that is currently lacking in your business, and whether you could both maintain the right guardrails to protect both your professional relationship and your personal one. Clear roles and responsibilities will be crucial as you look to grow and build a successful venture in the future together.”
Lottie Whyte is co-founder and CEO of MyoMaster, which she set up with her husband, Joe.
“I co-founded a business with my husband Joe three years ago, and for the most part it works incredibly well. There are three key reasons for this, the first is commitment – the work is all consuming and if I’d been married to someone who wasn’t in the business with me I’m pretty sure I’d be divorced by now! The second, trust, is vital and it’s great being able to start with a foundation already so strong. And finally, speed – being able to skip the pleasantries and communicate efficiently has been crucial.
“There can be drawbacks of course, from never being able to switch off from work and the constant pressure to build our global business can sometimes spill over into our personal relationship in a negative way. But overall, my husband and I already have a long history of working well together, from organising our three day wedding to managing house renovations – we know how the other one works.”