The Small Business LAB Podcast

The Hidden Costs of Employing Friends

• Kayla Reilly • Episode 1

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Ever wondered why hiring your friends or family could be the worst decision for your business? Let me paint you a picture: Imagine your best friend consistently missing deadlines, and now you have to choose between your friendship and your business integrity. Join me, Kayla Riley, as I unravel the messy reality of mixing business with personal relationships and the inevitable pitfalls that come with it.

This episode is packed with raw stories from my own entrepreneurial journey, including the painful lesson I learned when hiring a close friend ended in the demise of both our professional and personal relationship. We'll dive deep into issues like favoritism, blurred boundaries, and accountability—or the lack thereof. If you’re passionate about building a thriving business without sacrificing your personal relationships, this conversation is a must-listen.

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Kayla:

Welcome back to the podcast. I'm your host, Kayla Reilly, and today we are going to talk about a topic that might ruffle some feathers, but it's one that absolutely needs to be talked about why you shouldn't hire your friends or family. That's right. No friend employees, people. We're going to talk about why mixing business with personal relationships can lead to disaster, and how to protect your business and your relationships by keeping them separated. What's up, boss? Welcome to the podcast where we spill the tea on automating your business, juggling work and home like a pro and finding more time to do the things you actually want to do, because time and energy are the ultimate currency and money. Well, that should be working for us, not the other way around. Hey, I'm Kayla, your resident licensed therapist turned business badass. I started as an employee for someone else, but now I've got a seven-figure practice that practically runs itself, leaving me free to wrangle my little ones and help entrepreneurs like you on how to do the same. Whether you're just getting started out or ready to trade in the hustle for something that looks a little more like freedom, I'm here to help you make more money with less time and stress. So if you are ready to stop the grind and start living your best life, both at home and in business. You're in the right place. Let's do this.

Kayla:

Let's start with why we're tempted to hire friends and family in the first place. When you're starting a business, it can feel like the most natural thing in the world to bring in the people you trust the most. After all, your friends and family are the ones who've been with you through thick and thin and they know you better than anyone. You might think, who better to help me in my dream than the people I love? But here's the thing when you hire a friend or family member, you're not just bringing on someone to help with your business. You're mixing the two very different worlds your personal life and your professional life and that can get messy real quick. Let's talk about why this is such a risky move.

Kayla:

First and foremost, there's a lack of boundaries. When you hire a friend or a family member, the lines between boss and friend or employer and family member get super blurred. It can be really tough to maintain a professional relationship when there's so much history involved. Imagine this scenario your friend is consistently late with their work or just isn't performing up to the standards you need. How do you handle that? If they're just another employee, you have a clear, direct conversation about the expectations. But when it's your friend, suddenly it's a lot harder to be honest without worrying about hurting their feelings or damaging the relationship. And then, on top of that, the next time you see them at the pool or whatever, it's going to be awkward.

Kayla:

Another major issue is favoritism. Even when you don't intend to, it's almost impossible not to treat a friend or family member different than other team members in your business. This can lead to resentment from your other team members who feel like they're not getting a fair shake, and no one wants to be in a work environment where it feels like someone's getting special treatment. Then there's the issue of accountability. Holding your friends or family members accountable can feel so awkward you might find yourself letting things slide that you wouldn't with another person just to avoid conflict. But here's the problem when you do that, you're not just compromising your business, you're also compromising your own integrity as a leader.

Kayla:

Let me share a couple of stories no names, of course. Let's highlight how tricky it is when you hire friends. I had a really great friend that I brought on as a 1099 contractor in the beginning season of my company, my husband and I would hang out with her and her husband. They were really cool people. We had such a great time hanging out and also we had fun working together. She was a badass therapist. It was awesome to share referrals, support one another, but it was clearly not a boss employee relationship. So fast forward.

Kayla:

When it came time to make decisions for my company, one of the big decisions was switching to W2 employees so that I could make the changes that I really wanted to see and start creating some boundaries. I knew there was no possible way to go backwards with her. I tried so hard delicately to separate and end the contract, but understandably it did end the friendship, which totally sucked. I'm super bummed it went down that way and I'd love to say that that was my only friend ploy mistake, but it totally wasn't. This particular experience taught me that, no matter how strong the friendship, when business decisions are involved, it's almost impossible to keep things from getting personal or from people taking things personally. This is why it's so valuable to have a business coach or other experienced person supporting you to help prevent you from making these mistakes that others have already made. They're costly, they're uncomfortable, it's icky.

Kayla:

I've also seen situations where family members were hired and things got even more messy. A business owner I know hired her sister to handle like admin tasks because she knew she would do a great job of it. Great, whatever she knew. Her sister had just been let go. It was going to help with the family. We all have this like savior complex. But when the sister wasn't meeting deadlines the business owner felt super stuck. How do you fire your own sister? The tension like really spilled over into their family gatherings. They were stressed. There was so much drama. Nobody really wanted that or needed that. It's one thing to fire an employee it's already uncomfortable enough but try firing an employee that's your family member Whole different level of ick.

Kayla:

These stories aren't just cautionary tales. They're real examples of how hiring friends or family can damage both your business and your personal relationships. Your business needs employees who are fully committed, qualified, able to do the job. When you hire friends or family out of convenience or loyalty, you often don't get the best person for the job. You just get somebody you know and that can lead to serious consequences for your business's growth and success. At the same time, you risk straining the personal relationships that are important to you that you need in your life. Friendship and family bonds are hard enough to maintain in a healthy way, without throwing in complications of money and business relationships. When things go south and they often do I know you might be saying like it won't happen that way for me, trust me, they often do You're left with hurt feelings, broken trust and relationships that will never be the same or will be ended.

Kayla:

Instead of falling into this trap, there are plenty of alternatives to hiring friends or family. Hire qualified professionals. Focus on finding the best person for the job, not just the person who's closest to you. That might mean going through more formal hiring process, but in the long run it'll benefit your business. You can even use temp agencies or virtual assistants or companies like Fiverr or Upwork to find people who have experience. That is my toddler, legit banging on his crib because he just does not want to nap. I'm going to move forward.

Kayla:

Set clear boundaries If you do decide to hire friends or family members, despite everything I've warned you about not the wisest, but go ahead with your bad self. Make sure you set clear professional boundaries from the start, have a formal contract, a clear job description and regular performance reviews, just as you would with any other employee. Try to create that nice, clear boundary, even though I don't think it's possible maybe you're going to kill it, I'm not sure. You can also seek support in other ways. If your friends or family want to help find ways that they can support you without being on the payroll, maybe they can offer advice or connect with you for resources or help spread the word about your business. I know my dad came in and built this super cool chalk wall coffee area in my waiting room and that was really helpful. And then I've also had my husband set up the internet or come fix a couple laptops for us or order laptops for us. So he's not on the payroll but he absolutely does participate in the company.

Kayla:

It can also be really tempting to blur the lines between professional and personal relationships when you spend so much time with your team members. But crossing boundaries with your employees by becoming too friendly or overly involved in their personal life or showing too much of your personal life can really lead to complications that undermine your leadership and the health of your business. When the line between boss and friend gets fuzzy, it's really hard to make those objective decisions, enforce rules and expectations or address issues. It really affects your ability to manage effectively and also create a lot more stress for you, maybe even resentment for you or for your employee, and it can even lead to some legal risks. So maintaining those clear boundaries and that level of professionalism is so crucial for fostering respectful professional work environment where everyone knows where they stand and what's expected of them. Remember, you can be supportive and approachable without compromising your role as a leader.

Kayla:

I have a warm and what I would call intimate relationship, especially with my practice director and clinical director. I know a little bit what I would call intimate relationship, especially with my practice director and clinical director. I know a little bit about them, right, I know their partner's names, they know mine. I know you know their common issues. They know that I have a cat that, like angry, pees on my bed when I travel. It's really annoying. Oh, if anyone has any advice about that, please send it my way. But anyways, they know these little things and we have a really good, warm working relationship.

Kayla:

You do not have to be a freaking robot to uphold boundaries. You know every situation is different. However, I think if you know you're crossing that boundary, you are crossing that line. It's time to pull back, not being mean, but in a way of saying, okay, I have to pull back. I have to reestablish this professional boundary so that I can be an effective leader and my business can continue to grow. And, at the end of the day, it's so important to remember that your business is your livelihood and the livelihood of other employees, of other team members. It deserves to be treated with the utmost professionalism, and that means making decisions for the business, even if they're tough, and that means making decisions for the business, even if they're tough.

Kayla:

Avoiding friend ploys is so necessary. It might feel hard in the moment, but in the long run, it's going to save you so many headaches and will protect both your business and your relationships. I challenge you to take a good, hard look at your current team and ask yourself if you're holding on to any friend ploys. If so, it may be time to make some changes for the sake of your business and your sanity. As always, I'd love to hear your thoughts or your questions on this topic. Share your experience with me on social or through my website, and don't forget to subscribe, rate and review the podcast. Your support means so much. Talk to you next time and that's a wrap.

Kayla:

Boss, thanks for tuning in to the SB Lab, where we balance work and home like a boss. Remember you have the power to build a business that not only brings you meaning, but also affords you time, money and freedom to craft your ultimate life. It's all about making small changes now that lead to big results later. So keep taking those steps, keep pushing forward and remember you've got this. If you're ready for more, hop over to my website, kaylarileycom, where I have freebies to support you in your small business journey. If you like what you heard, leave me a review. It's like a high five in the podcast world. And don't forget to subscribe so you're ready to rock next Monday morning when the new episode drops. You don't want to miss these gems Now. Get out there, make bold moves and show the world what it means to be a boss. I'll see you next time.