Here is an advice for all small business owners – DO NOT HIRE FRIEND OR RELATIVE TO WORK IN YOUR BUSINESS, if at all possible. I know it sounds harsh and may be even counter-intuitive. After all, in small business you need someone who you can trust with your money and who else would be better suited than a close friend or a relative who you know very well and can trust.
I am not arguing with the benefits of having a trusted friend or relative in the business who can watch for your good. However, you have to weigh this against the downsides that come with it. From what we have seen and experienced the downsides exceed the benefits; which calls for avoiding the situation, if possible.
So what are the problems and issues that come along with the hiring of a close friend or a relative in your business? Wall Street has good examples of the problems here. Here is my list based on my experience and that of some of our business colleagues:
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