Hiring Friends - by Ravi Patel


Entrepreneurs can use all the help they can get when starting businesses. Family members and friends provide assistance when an Entrepreneur bootstraps a start-up. Hiring paid employees at this time is a stretch due to limited funds.


The situation changes after the Entrepreneur becomes fairly well established with steady revenues and cash inflows. Not being able to do everything, an Entrepreneur should then hire paid employees.


Should friends be hired as employees? If friends helped during the start up phase, they might have reasonable expectations of getting employment at the company. Their familiarity with the business could be helpful as opposed to hiring someone new.


However, Entrepreneurs should be very careful when hiring friends as employees. You could lose both!


Setting high performance expectation for employees is necessary for good business. If such standards are consistently not met, an Entrepreneur should hold appropriate employees accountable – from reprimands, counseling, probation all the way to termination as necessary. Friends might have a difficult time accepting such actions from a friend who is also the boss.


Friends who are employees might expect  leniency or latitude due to their friendship, but that might not be good for business and morale of other employees. If an Entrepreneur rightfully holds friends to the same standards as other employees, he or she might not only lose them as a friend but could also lose an employee.


It is a difficult situation to manage and Entrepreneurs might want to be cautious hiring friends as employees.


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