Family businesses make up a significant amount of businesses in Australia, but extra care is needed when working with family members.

According to Family Business Australia, 70 percent of all businesses in Australia are family businesses.

While working with family can be rewarding, it also has its challenges. Although the start of the working relationship can seem easy, good preparation now can help avoid future trouble and long term challenges for family relations down the track.

Maintaining good working relationships with family

If you’re involving your spouse, a sibling or another relative in your business, here are some tips for supporting good working relationships with family members.


Employee documentation is as critical for a family business as any other. Take the time to write down the role your family member will fill, including responsibilities, procedures and performance goals. Have them sign a contract of employment before they start working with you and make sure they are provided with any training they need to carry out their job effectively. If your family member doesn’t meet performance objectives, the outcome should be the same as for any other employee.

Set expectations

Establish a ‘chain of command’ for your business and ensure your family member fully understand how it works. You need to set a clear rule from the beginning that family and business are separate, and understand that their expectations might be different to yours. Explain that you expect to treat them in the same way as any other employee while you are in the workplace.

Hire for the role

Make sure your family member is as qualified as anyone else who might apply for the role you need to fill. It can be demoralising for other employees as well as the employed family member if they are under-skilled for the work they are meant to perform.

Distance yourself

Appoint a non-relative as a business mentor for the family member to help reinforce the rules and provide guidance, as well as distancing you from any disciplinary action.

Have non-business time

When working with your spouse, life partner or children in your small business, it’s important to make time apart to allow for each other’s friendships and hobbies and protect the rest of your personal relationship outside of work by making sure you have ‘business free zones’ and family time when you don’t discuss business matters.

More information

With the right groundwork in place to minimise risks, working with family can be a productive and rewarding experience. If you would like to know more about involving family in your business, read:

Legal and risk
18 September 2023