Organizing your family business

We are now on our sixth edition of the multi-part series on the topic of tasks you should be adding to your “start up to do list”. In past weeks we have discussed starting your small business checklistorganizing your startup, are you sure you need to hire now?, when do you need a lawyer? and the importance of small business accounting advice.

This week’s topic: Organizing your family business.

Often I hear from business owners that they are being “helped” by family members when they start their business. That’s perfectly fine, however you must know that most government offices consider your family member a regular employee. That means you must follow the same rules such as the Provincial Employment Standards Act along with registering with your provincial workers compensation board.

In a previous blog I wrote titled: “Hiring a family member? Here’s why you need to consider using Employment Insurance rulings”, I identified my top five reasons why business owners hire family members:

  • Family members are available to you beyond traditional working hours or days.
  • You may be comfortable leaving your business with them for a day or two.
  • They may have a specific skill you need (e.g., a cook, graphic designer, assistant).
  • You give them an employment opportunity and experience.
  • You may be passing off your business to a family member in the future.

As part of organizing your business, identify the talents of those within your family to assess which individual you will need support from.

Determine the following factors:

  • The “need”: what tasks do you need to be completed.
  • The “who”: whom within your family holds the skills/talents/credentials to get it finished.
  • The “time”: be clear and honest on the commitment level you require (i.e. part-time/full time basis).
  • The “frequency”: If they are not required unless “by project”, say a graphic designer, understand the employees vs. self-employed rules, perhaps they are considered their own boss.
  • The “how much”: Any employee, especially family member, want to ensure they are receiving the right compensation. The Government of Canada has a great tool to ensure you’re as competitive as the job market.

Be intentional when describing each of the factors above. You will soon realize you have enough details to create a job description, and provide a letter of offer. If you require a template for these, review our CFIB site by clicking here. Employees, regardless if they are family or not, do require clear instructions to understand their role.

So to set you on the right track, here is your weekly checklist. Remember to share your checklist with your social media entrepreneur community by using: #MyStartUp and #SmallBizChecklist

☐ Have you categorized your family or friends based on skills that can help your business?
☐ Keep this in mind: EI for Family Members from Service Canada
☐ Have you considered who will be on payroll and who will be on contract? Perhaps you need a refresher Employees vs. self-employed.
☐ Do you require workers compensation?
☐ If you wish to know how much the job should pay, click here.

The Canadian Federation of Independent Business has a variety of webinars available, including one that provides you with information on the EI rulings process.

Lastly, read our Tips and tools to help manage your family business as well to get further insight.

_______________________

CesarCesar Gomez-Garcia has been with the Canadian Federation of Independent Business for six years. His current role at the CFIB is helping members with their questions on compliance. These questions can range from employment standards to health and safety, as well as complicated red tape situations that small businesses face. His passion is reading and writing about entrepreneurship. Learn more about Cesar via LinkedIn and follow him on Twitter @josuegomezg.

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