Blood is thicker than water — and sometimes more important than money. If your startup is a family business, you know what we’re saying.
But as your family startup grows, it’s only a matter of time before your staffing needs outstrip even the smaller branches of your family tree. It’s time to hire an outsider.
A lot rides on this, whether you’re bringing in someone at a high level for their professional expertise — or just because you’ve run out of sisters to answer the phone that, happily, won’t stop ringing.
Here’s how to navigate this pivotal moment in the life of your startup:
Maintain family control
Someone coming into your company as a savior or make-over artist may believe his own success and expertise should entitle him to a seat at the family table. If it comes up, cut it short. Spell out very clearly that the potential rewards do not include a place among the company’s majority shareholders.
“We had known the guy we hired as president for an extended period of time, and it has worked out very well,” says Kevin Fox, CEO of family business Viable Vision LLC, a consulting firm in Gurnee, Ill. The company’s first outsider, brought in two years ago to jump-start growth, “has a not-insignificant equity stake in the business,” Fox says. “But we kept the voting shares concentrated in the family’s hands.”
Look for someone with “family traits”
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