One purpose for having large families, historically, was to ensure that someone was around to carry on the family business and to keep the family wealth intact. The tradition began when a family's fortune included castles and sword-wielding armies, and, while family members still offer great potential resources for staffing a business, today's business owners have many reasons to be more professional about just who they're hiring.

Quentin J. Fleming, author of Keep the Family Baggage Out of the Family Business (Fireside Book, 2000), says family-owned businesses:
• Make up as much as 95 percent of all U.S. companies.
• Generate between 40 percent and 60 percent of the U.S. gross domestic product.
• Provide more than half of all wages paid.
• And, account for one third of the Fortune 500 companies and nearly two thirds of all companies traded on the New York Stock Exchange.

Although the US federal government does not track "family business" as a category in its census data, some estimates say that more than 12 million family businesses exist in the United States. In the next five years approximately one third of family businesses will see control pass from one family member to another, Fleming says. Most of those businesses will face serious problems during succession, and may fail. Businesses that survive don't necessarily thrive, and may yet fail in the next succession.

Fleming warns that dysfunctional patterns that may exist in a family at home carry over to the family business, often with disastrous results. If one has never experienced working in a family business with personality strains between family members, try watching the Teutels of "Orange County Chopper" or Boyd Coddington and his wife in "American Hot Rod." The arguments may be a show for the camera, but one can sense the effect on other workers in the shop.

Hiring family members because other members of the family are putting pressure on the owner never works out, says Joseph H. Astrachan, Ph.D., director of the Cox Family Enterprise Center at Kennesaw State University in Georgia. Such a situation not only diminishes the business owner's role as leader, but the obliga-

tion potentially can lead to resentments that spill over into familial relations, particularly if the family worker was unqualified for the job to begin with.

Start with a plan
Companies that will compete successfully in a marketplace know the value of creating and following a plan of action in all business areas. The same holds true for family operations in specialty markets. Astrachan says the owners of family businesses should create guidelines and stick with them. "The guidelines must be based on whether the individual is to be a regular employee, or if they are to be a future leader of the company," says Astrachan.

Fleming says that basic questions for business owners to ask of themselves when considering hiring family should include:
•Would I hire this person if he/she were not a family member?
•What problems would occur if I had to fire this person?
•Would this person be required to meet job expectations that are different from any other employee?
•How much would my role as business owner change if I hired this person?
•If hired, could this person possibly be made aware of information about my business or myself that I don't want them to know?

The first two questions are fairly straightforward. The third question is more intricate, and can involve whether the individual has different duties, hours or compensation, "just because they're family."

An understanding should be established if the family employee is to have a greater say in decision-making than other workers. Additionally, if time on the job is meant to be separate from home life and family matters, a distinction must be made clear to the employee as part of their hiring.

The last question may apply to a business owner wanting to keep details of day-to-day operations from becoming discussed at home. Some business owners with "skeletons in the closet," whether personal or business-related, definitely will want to avoid the topic brought to light before a dinner-table family tribunal.

Avoid the stigma of nepotism
Workers in most businesses express suspicions when one of the boss's family members comes to work in the company. While hiring decisions are up to the owner, other employees may feel marginalized and less motivated to work at peak efficiency if they have a sense that "the new guy can get away with it — why can't I," or that, despite their best efforts, they can't rise to a leadership position because the job is already promised to the boss's kid. Additionally, non-family employees will be uncomfortable criticizing a worker who is both a family member and a potential future boss.

To keep on-the-job tension to a minimum, Fleming recommends that business owners discuss with the staff the idea of bringing in a family member before the actual hiring. Even if the goal is eventually to turn operations over to kin rather than crew, the owner will have laid groundwork for supporting the future boss, and can head off problems before they arise.

Positives
Despite the potential for turmoil and interpersonal problems, most members of families that are involved in a business are aware that their shared values, beliefs, attitudes and goals serve to strengthen the company. And, family members have greater commitment to the success of the business because, besides providing them a paycheck, the company supports the continuation of the family. Fleming says family employees also understand just how devastating the business's failure could be to themselves and to their families.

Moreover, values and traditions found in family businesses often include a strong desire "to develop and maintain close relationships, which customers can sense," Fleming says, noting that many customers prefer dealing with a family business because of the sense of goodwill that the close relationships create.

However, having relatives does not guarantee that a pool from which to hire is available. Many members of families can be less inclined to step into a position in a family business if they have interests outside the area of the business. While there is no imminent threat to the institution of the family business, the pursuits of personal interests among family members has led to short lives for many companies that can only hope that the next generation on which they'll depend will have the same interests at heart.

Many scholastic institutions now have divisions that study family business practices, and offer programs and guides to help entrepreneurs bring family members into their business to ensure its continuation and success. Among these institutions is the Cox Family Enterprise Center at the Coles College of Business at Kennesaw State University in Kennesaw, Ga. The Cox Family Enterprise Center can be reached at 770.423.6045. Its website is www.kennesaw.edu/fec

Quentin Fleming offers an online test that is designed to measure how well a family business is implementing effective business practices. The self-examination is available at www.familybaggage.com/selfexam.htm