Going into business with someone you have a close personal relationship with can be challenging in the best of circumstances. According to New Century Financial (www.newcenturyfinancial.com), whether it’s a sibling, adult child, parent, or your best friend, you have different relationships with these people at work and outside of work. This often leads to conflict, especially in the early days of your business venture.

It’s important for all people involved to establish firm boundaries immediately after going into business together. While you may not think this is necessary, it only gets harder to do if you wait. Discuss your expectations of each other early and be willing to shift gears when things aren’t working or there are frequent misunderstandings.

Avoid Playing Favorites

Tensions can run especially high when you manage employees who are family members as well as those who are not. Whether it’s legitimate or not, non-family member may see favoritism in nearly every interaction. When one member of the family is in a position of authority over another, it’s especially important to treat everyone the same. That means no laughing it off when your brother is 10 minutes late while another employee gets written up for it.

At the opposite extreme is the manager who is overly critical of his or her family member to avoid looking like that person is receiving special treatment. If you find it difficult to strike a balance, ask for feedback from all of your employees.

Make Sure You Hire Employees Based on Merit Alone

No matter what your mother says, you’re under no obligation to hire your unreliable sister who hasn’t held a job in years. In fact, there are many more risks involved with doing so than upsetting your parents. An employee who is regularly undependable at work does not put your company in a favorable light. It’s also a safety hazard. The last thing you want is your other employees looking at your wayward family member for clues on the type of behavior they can get away with on the job. Every person you bring on should have the skills, education, and experience necessary to succeed in his or her new role.

Keep Home and Business Completely Separate

If you don’t share the same last name as the family members you mange or work with, others don’t necessarily have to know that you’re related. You can certainly share this if you wish, but try to conduct your business in such a way that customers, suppliers, and other employees wouldn’t guess that you share genetics as well as a workspace. This can be challenging, but it’s not impossible when you keep your conversations during the day focused on business. If you’re the manager, don’t ask the rest of your staff to do special favors for your family member during the workday or outside of it.

Agree on Financial Management if You’re Equals

The rules change a bit if you start a family business as partners or a corporation. In this case, it’s important to see each other as equals and not revert to any roles you may have assumed during childhood. This is especially true when it comes to managing business finances. Whether you are considering company invoicing services or giving an employee a raise, it should only happen when all family members at the management level agree.