The Challenges of Working with Family and How to Fix Them

Working with family sounds great in theory. You already know and trust each other, and you get to build something together. But if you’ve ever been in a family business, you know it’s not always easy. Arguments, favoritism, and personal issues can make running a business with family stressful.

As a business coach, I’ve worked with many family businesses. I’ve seen some thrive and others fall apart. If you’re dealing with problems in your family business, here are some common challenges and solutions to help keep both your business and relationships strong.

Biggest Problems in Family Businesses (And How to Fix Them)
1. No Boundaries Between Work and Home

The Problem: When you work with family, it’s hard to separate work from personal life. Business problems might come up at the dinner table, and personal arguments can spill into the workplace.

The Fix:
  • Set clear work hours and agree not to talk about business outside of those times.
  • Have business meetings in a professional setting, not at home.
  • Treat each other like coworkers at work, and family at home.

2. Favoritism and Unfair Treatment

The Problem: Sometimes, family members get hired or promoted based on relationships instead of skills. This can make other employees feel frustrated, especially if a less-qualified relative gets special treatment.

The Fix:
  • Hire based on qualifications, not last names. Make sure all employees (family and non-family) meet the same standards.
  • Set clear job descriptions so everyone knows their responsibilities.
  • Make promotions based on performance rather than family ties.
3. Power Struggles and Disagreements

The Problem: Families don’t always agree, and in business, those disagreements can turn into serious fights. Sometimes, multiple people want control or have different ideas about how things should be run.

The Fix:
  • Give each family member a specific role and decision-making power in their area.
  • Put the business first, decisions should be made based on what’s best for the company, not personal opinions.
  • Use an outside advisor to help with major business decisions. A coach or board of directors can help settle arguments.
4. Holding Family Members Accountable

The Problem: It’s tough to discipline or fire a family member when they aren’t doing their job well. You might feel guilty about calling them out, or they might not take criticism seriously because you’re “just family.”

The Fix:
  • Set the same rules for everyone. Family members should be held to the same standards as any employee.
  • Do regular performance reviews so issues are addressed professionally.
  • If necessary, remove family members who aren’t a good fit. It’s hard, but sometimes it’s the best choice for the business and the family.
5. No Plan for the Future

The Problem: Many family businesses don’t plan ahead for when the current owner retires. This can lead to confusion, fighting, and even legal trouble when it’s time to pass the business to the next generation.

The Fix:
  • Start succession planning early, don’t wait until retirement is near.
  • Be honest about leadership abilities. The best person for the job may not be the expected heir.
  • Train the next generation so they’re ready to take over when the time comes.
Final Thoughts: Keep Business and Family Strong

A family business can be an amazing opportunity, but it takes work to keep both the business and relationships healthy. The key is to stay professional, set clear expectations, and communicate openly.

If your family business is struggling, don’t be afraid to get outside help. A business coach, lawyer, or financial advisor can help solve conflicts before they get out of control.

Need guidance? Let’s talk. At Coachfirm, we help family businesses find solutions so they can succeed, without damaging relationships.