Surviving a Family Business

My business partner and myself are childhood friends. We started our laboratory together in 1981 and we worked together in another laboratory for four years prior to that. We have basically spent our entire lives, or most of them, working or playing side-by-side. While it’s not technically a family business, it might as well be one. I don’t know if this is true, but I have heard that as many as half of the dental laboratories in the U.S. are family businesses.

Even if you don’t have a family business, it’s often hard to not treat your employees like family. In fact, as the owners of small businesses, we often spend more time with our employees than we do with our own families!

If you run your business like a family, you're headed for disaster. The only thing that could possibly be worse would be to run your family like a business. Business values and family values are fundamentally opposite.

Healthy families are built on unconditional acceptance and absolute equality. "No matter what you do, or don't do, your Mother and I will always love you. And we will always love your brothers and your sisters just as we love you."

You can't have favorites in a healthy family.

But unconditional acceptance and absolute equality have no place in a business. Healthy businesses are built on performance-based acceptance. And families are ruined by it.

Early partnership.

Stepping up to the platform in the afterglow of a more than complimentary introduction, Lyndon Baines Johnson said, "Thank you. Thank you for that very generous introduction. I only wish that my parents could have heard it... My father would have enjoyed it. And my mother would have believed it."

LBJ's dry delivery of that quip makes folks laugh every time they hear the recording, but yesterday the thought popped into my mind, "Yes, his mother probably would have believed all those lofty things about him. That's exactly the sort of lift it takes to raise a child up to become the president of the United States."

For years, the ideal dental laboratory had a labor percentage of about 30 percent. That was the goal we always strived to reach or even beat. Today, with CAD/CAM technology, electro-deposition and 3D printers, we are looking at lowering those labor percentages significantly. This is often simply traded for increased material costs, but remember, every labor dollar also has associated tax and benefits dollars associated with it, so it’s a fair trade off, hopefully anyway.

Many laboratory owners I speak to, especially those that are involved family businesses, frequently run at 50 percent or greater direct labor expense! After all, it’s difficult to give yourself a raise or take a bonus when you have a relative or long-term employee who is also your fishing buddy sitting right next to you all day. This is one of many reasons I am a huge proponent of production-based incentive programs or salary positions that include a production differential for all employees in technical positions.

Also, I use performance-based incentives for indirect employees that are based on meeting company sales objectives, operating within budgetary limits or reaching other pre-determined goals.

Can you work productively and successfully with members of your family? Sure you can, just as long as you remember never to talk about home in the workplace, or the workplace at home. To do otherwise can only end badly. And know that while family values will rule in the home, business values will rule in the workplace.

Understanding that simple premise, you only need to ask, "Am I at work or am I at home?"