How to make your family business thrive

By Northern Industrial

26 Nov 2014

There is an old saying that goes, “never work with family”, but with family businesses accounting for two thirds of firms in the UK private sector it looks like many people haven’t taken this advice seriously.

That’s not to say that working with family cannot be extremely frustrating and challenging as well as being very rewarding.

David Lenehan is the sales director of Northern Industrial, an automation repair provider based in the UK. While his brother decided to pursue other career interests, David decided to join his father's business in 2007. Since joining, the company has gone through some major changes; turnover has increased by 400%, staff levels have increased from 9 to 43 and they now export to 126 countries worldwide compared to zero in 2007.

Family businesses are the cornerstone of both British and American business but can present some unique entrepreneurial challenges that can cause major problems to your business and family life. Even Luke Skywalker had problems working with his dad. So if you are in business and thinking of working with relatives, follow these tips to make your family-run business thrive.

Keep it in the office

Keeping work and your personal life separate is extremely difficult since most family run businesses operate on both levels all of the time. “Having a clear work and personal life cut off would be nice but it is almost impossible to have an absolute clear divide” explains Lenehan. “Instead of having a blanket rule we found setting times that were off limit, such as the dinner table, to be more manageable”. This enables everyone involved to get a break from their respective jobs.

Keep it legal

It is fairly common for family businesses to feel that employment contracts are unnecessary for family members. After all why waste time with unnecessary formalities when you have a business to run? Well, firstly it is a legal requirement that all employees to have a contract of employment which defines the particulars of employment including hours of work and holiday entitlement.

“You should treat this like any other business decision and prepare yourself for the future. If Jeremy Kyle has taught me anything it’s that families fall out” explains Lenehan. In the case of a family dispute, the contract will help provide guidance on the appropriate mechanism to deal with such circumstance. This includes having an appropriate notice period in the contract. In the worst case, the family member might leave to join a competitor or set up on their own in competition with the family business. In such circumstances, you will want to prevent them from taking and misusing the business’ confidential information; from competing with the business; from soliciting the customers you have worked hard to obtain; from poaching your other employees; and, in certain businesses, protecting the intellectual property of the business.

Keep it defined

Having defined roles and responsibilities is another key way to ensure resentment does not build up between family members, and also other members of staff in general. If roles and responsibilities are not clearly laid out it makes it difficult to keep things fair, such as pay, and can also lead to an unbalanced workload with one person feeling like they do far more work than another. It can also lead to standing on each other toes.

Having clear roles can sometimes be difficult in the early stages of the business as there will be less members of staff and therefore each person within the business will be picking up varied responsibilities. As you grow, be sure to clearly mark out who does what and that it is fair.

Keep it pro

We are all guilty of talking to our families in not the most pleasant of ways - you can say things to your relatives, especially close ones, that you just couldn’t get away with saying to others. “Just because you are a family member it doesn’t mean that you can say things that you wouldn’t be allowed to say to any other member of staff” says Lenehan. Keep it professional. Not only does it potentially create a volatile and uncomfortable atmosphere for everyone else, it can also make it difficult to enforce boundaries with other members of staff if you are failing to follow them yourself.

Keep it realistic

As the boss’s son or daughter it is difficult not to feel added pressure to perform. “It is easy to get paranoid and feel people think that the only reason you are employed is due to nepotism.” explains Lenehan. In the early days the temptation is to work extra hours or go that extra mile and then some to prove yourself to your colleagues.

Unfortunately by being the office superman you often tread on other peoples toes, cause extra confusion and de-motivate the other staff. As a newcomer to the family business, you should always appreciate what is already there even though you see improvement. No matter how much of an expert you are you still need to make sure that you keep others in the loop and respect their ways of doing things.

Keep it fair

Money is a very sensitive issue in most businesses and even more so in a family business. In 90% of cases it will be the parent who decides the child’s salary and compensation system and it can be difficult to set the remuneration level.

On one side it is easy to take the relationship for granted and assume the family member will be okay with whatever their pay is because “we’re all family”. On the other side, some mix compensation for a job with gifts to a family member. This can result in high salaries which do not reflect the work being carried out. This might be caused by a parent wishing to maintain some basic level parental control through pay or to mitigate parental guilt.

Not only do high wages for family members affect the overall profitability of the business but can also cause negative feelings among other member of staff. Resentment and a “you and them” feeling among other staff can lead to all sorts of problems including poor productivity and high labour turnover. The best method is to pay the market rate to family members based on their experience and ability.

Keep it separateWorking closely with a family member can put a real strain on your relationship. “There were times when I could have killed my Dad” explains Lenehan, “We soon realised that working in the same office, day in and day out was not going to work. We each need some space now and again”. Thankfully there are some easy and effective solutions available. One of the most effective is to simply rearrange the office slightly so family members are out of earshot of each other. Another solution is to work from home one day per week to minimise the interaction time.

Enjoyed this? Read more from Northern Industrial

Latest news

1

Preston firm starts work on major Merseyside warehouse development Huyton 220 1

Preston firm starts work on major Merseyside warehouse development

25 Sep 2026

2

Pothole repair machine seals hattrick of award wins for Multevo Hugh Dennis Presents Multevo With Product Of The Year Award

Pothole repair machine seals hattrick of award wins for Multevo

25 Sep 2026

3

The north needs its older homes in the plan Zak Khan

The north needs its older homes in the plan

25 Sep 2026

4

Sowena signs up to sponsor Red Rose Awards Deal of the Year RRA Sowena Group

Sowena signs up to sponsor Red Rose Awards Deal of the Year

25 Sep 2026

5

Cyber specialist wins £295,000 of Innovate UK funding    Richard Stephenson Yudu Sentinel

Cyber specialist wins £295,000 of Innovate UK funding   

25 Sep 2026

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
All In One Network
LBV Website Events GraphicAll In One Network 15 Oct 2026

All In One Network

The Leisure Box, Northlight, Glen Way, Brierfield , BB9 5NH

14:00 - 16:00

Sub36 Awards 2026
Sub36 WW Logo720 16 Oct 2026

Sub36 Awards 2026

Park Hall Hotel & Spa, Chorley, PR7 5LP

18:30 - 00:30

LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

Lancashire

08:30 - 10:30

Lancashire Business Day 2026
LBD26 WW Logo720 27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

Help to Grow: Management Course
Help To Grow 25 Sep 2026 - 15 Dec 2026

Help to Grow: Management Course

University of Lancashire, Preston, PR1 2HE

09:30 - 12:00

90 Day Business Planning Workshop
90 Day Business Planning Workshop 25 Sep 2026

90 Day Business Planning Workshop

The Holiday Inn, Bolton, BL1 2EW

09:00 - 16:30

Employment law webinar - an update on key ERA 2025 changes
LBV Website Events GraphicEmployment Law Webinar 29 Sep 2026

Employment law webinar - an update on key ERA 2025 changes

Online, Preston, PR1 3JD

12:00 - 13:00

Preston Tech Connection Coworking Day at Society1
Preston Tech 2 29 Sep 2026

Preston Tech Connection Coworking Day at Society1

Society1, Coworking Space, Preston, PR1 3LT

09:00 - 17:00

Business on Par Burnley
Business on Par LBV Banner (1200 x 800 px).png.png 30 Sep 2026

Business on Par Burnley

Prairie Sports Village, Burnley, BB10 2FU

09:00 - 11:00

Unfair Dismissal: The critical update employers can’t afford to miss
Lancaster And Morecambe Logo 1 30 Sep 2026

Unfair Dismissal: The critical update employers can’t afford to miss

The Longlands Hotel, Carnforth, LA6 1JH

08:00 - 10:00

Breakfast Social and Coworking Day: October
Breakfast Social 01 Oct 2026

Breakfast Social and Coworking Day: October

Society1, 9-10 Cross Street, Preston, PR1 3LT

10:00 - 12:00

Chamber Breakfast Networking – October
Lancaster And Morecambe Logo 1 01 Oct 2026

Chamber Breakfast Networking – October

Unique Kidz Youth & Community Centre, Morecambe, LA4 4NW

08:00 - 10:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV129 Online Graphic
Subscribe now

Weekly news bulletin