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How to fire your friends and family without losing your business.

Fired box- for rawmarrow post about friends and family in business


You started your small business with the best intentions, maybe even roping in some close friends or family members to join you on this business journey. Starting a small business with close friends or family members is often an exciting venture filled with enthusiasm and shared goals. However, as time goes on, circumstances might arise that make it necessary to consider parting ways with them from a business perspective.  

Recognising the need to separate business and personal relationships is crucial for the success and growth of the business. While working with friends or family can provide a strong support system, it can also lead to challenges that hinder business operations. Differences in work ethic, conflicting visions, or even personal issues can arise, jeopardising the harmony within the team.  

When the realisation dawns that it may be time to part ways, it is essential to approach the situation with sensitivity and professionalism. Open and honest communication becomes paramount. Begin a conversation where the concerns and reasons for the separation are expressed. This can help ensure that both parties understand the decision and its necessity.  In some cases, it may be possible to restructure the business arrangement, allowing for a more harmonious working environment. However, if parting ways is inevitable, it is crucial to establish clear guidelines for the separation process. 

woman hands over her face at desk for rawmarrow blog post firing your friends and family.

Case Scenario.

We had a client explain this situation to us recently and lots of small business forums post similar problems. In t case both parties recognised and acknowledged the problem, which is not always the case. 

Meet Dave, the owner of a popular café called “Bean Bliss” located in Melbourne, Australia. (All names have been changed). Dave has always had a knack for brewing the perfect cup of coffee, and his café has become a local favorite for its warm ambiance and excellent coffee. To help manage the growing number of customers, Dave brought in his cousin, Emily, as a barista and cashier.

For a while, things were running smoothly. Dave and Emily enjoyed working together, serving delicious coffee and chatting with regulars. However, as Bean Bliss gained popularity and the café started to get busier, Dave noticed that Emily was struggling to keep up with the fast-paced environment. Orders were getting mixed up, and customer service was slipping. Dave, known for his friendly demeanor knew he had to address the situation before it impacted the café’s reputation. Here’s how this scenario unfolded:

One sunny afternoon, Dave invited Emily for a cup of their specialty brew in a quiet corner of Bean Bliss. He started the conversation with a smile and explained the situation. Dave gently explained that the café’s success was putting a strain on their operations, and they needed someone with more experience to help with the increasing workload. He assured Emily that it was about the café’s growth, not her abilities.

Emily admitted that she was finding it difficult to keep up.

In this case Dave suggested transitioning Emily transitioned to a different role in the café. Bean Bliss continued to flourish. Dave maintained a friendly and humorous atmosphere in his café. Emily adapted to her new role and found that she enjoyed managing the café’s social media presence and interacting with customers differently.

Dave managed to navigate a challenging situation in his café while preserving their relationship, thanks to his friendly approach, humor, and strategic thinking.

Firing friends and family members.

Firing friends and family members can be a delicate and challenging task, but sometimes it becomes necessary to maintain the success and professionalism of your business. When approaching this sensitive situation, it is crucial to handle it with care to minimise the impact on both your personal and professional relationships.  Firstly, it is essential to separate personal emotions from business decisions. Focus on the reasons behind your decision, ensuring they are objective and justified. Communicate your concerns clearly and openly, emphasizing the impact on the business and the need for change.

Firing an employee is never easy, but it can be even more difficult when it’s a friend or family member. However, as a small business owner, you sometimes have to make tough decisions for the good of your business. If you find yourself in this situation, there are a few things you can do to minimise the impact on your personal and professional relationships. 

Planning and preparation are key.

Don’t just land this conversation on them out of the blue. You are aware of the problems so you should raise the problems to see if they can be resolved prior to saying you need to let them go. Give your friends or family members an opportunity to improve. If improvement doesn’t occur over a reasonable period of time, schedule a private meeting to discuss the situation. Choose a neutral and comfortable environment, allowing for an open dialogue. We also suggest it may also help to use an HR Professional such as Positive HR

One key advantage of having an HR professional on board is their ability to handle complex employee relations issues effectively. They are well-versed in conflict resolution techniques and possess the skills necessary to address disputes, grievances, or disciplinary actions in a fair and impartial manner. This ensures that all parties involved are treated equitably and that any potential conflicts are resolved in a professional manner,

Be professional.

It’s important to remember that even though you’re firing a friend or family member, you’re still doing it as a business owner. This means that you need to be professional and objective in your approach. Avoid getting emotional or making personal attacks. Instead, focus on the facts of the situation and why you’re making the decision. During the meeting, maintain a professional and empathetic tone. Express appreciation for their efforts and contributions, acknowledging the personal connection. Clearly articulate the reasons for the decision, outlining how it aligns with the business’s best interests. Offer support and suggestions for their future endeavours, demonstrating your desire to maintain a positive relationship outside of work.

Be honest.

Don’t sugarcoat the situation or make false promises. Be honest with your friend or family member about why you’re firing them and what their options are. This will help them to understand and accept your decision.

Be compassionate.

Even though you’re firing someone, you should still be compassionate. Remember that this is a difficult time for them, and they may be feeling hurt, angry, or confused. Offer to help them find a new job or provide them with other support.

Be clear about expectations.

Before you fire your friend or family member, make sure you’re clear about your expectations. This includes things like their severance package, their notice period, and their transition out of the company. This will help to avoid any misunderstandings or disputes down the road.

Communicate with your team.

Once you’ve fired your friend or family member, it’s important to communicate with your team if you have one about the situation. This will help to prevent rumors and speculation. Be honest and transparent about why you made the decision and how you plan to move forward.

Following these tips can help you to fire your friends and family without losing your business. It’s important to remember that this is a difficult decision, but it’s sometimes necessary for the good of the business.

Here are some additional tips that may be helpful:

Have a plan.

Before you meet with your friend or family member to fire them, have a plan in place. This should include what you’re going to say, how you’re going to answer any questions they may have, and what severance package you’re going to offer.

Be prepared to walk away.

If your friend or family member becomes emotional or refuses to accept your decision, be prepared to walk away from the meeting. You can always come back to the conversation later when things have calmed down.

Set boundaries.

It’s important to set boundaries between your personal and professional relationships. Once you’ve fired a friend or family member, it’s best to avoid discussing work-related matters with them.

Firing a friend or family member can be a difficult and emotional experience. However, following the tips above, you can minimise the impact on your personal and professional relationships.