Katie Donno giving thumbs up

Is employing family members good for business?

Employees are sometimes afraid to voice their opinions. The same goes for disappointments, frustrations or general ideas, especially when it comes to changing the way things are done. As you can imagine, this can be damaging to the growth of a business; it can even stagnate it completely.

Working with family members, however, is a completely different story. Having such a deep relationship and history promotes honesty that you just don’t get from non-family employees, and this can be very good for business.

Yes, complete honesty can be a good thing! Here’s how working with family promotes honesty and why that’s so important.

Working with family promotes honesty…

Employees are the beating heart of any business; they are the key workers on the frontline and they are knee-deep in the day-to-day running of the business so they know what’s working and what’s not.

This insight is extremely valuable to every business owner, but not many employees share it. Why? Because not all businesses make their employees feel ‘safe’ enough to voice their concerns or to pitch new ideas.

This is where working with family members is extremely beneficial. It promotes honesty because:

  • Family members are not scared of getting fired (technically they can, but it is unlikely)
  • You know how to communicate with each other better (you both know the best way to speak to each other and how you will best respond)
  • You can have business meetings in more relaxed settings (for example, a relaxed meeting over dinner better promotes honesty)
  • You both want each other’s best interests so will listen (listening is often the weak link in communication)
  • Family members are trusted to go with their ideas and to run with it (you know your family members, so you put more trust and responsibility with them. In return, they feel psychologically safe to take initiative and voice their ideas).
  • Family members aren’t scared of making mistakes (many employees don’t take initiative because they are afraid of repercussions. Family members aren’t as they know that you will help them to learn from their mistakes).

…and this is great for business

Honesty is essential for building integrity in the workplace which in turn is essential for businesses to evolve and grow. You may not think that the success of a business is all that affected by honesty, but you’d be surprised. Here is why it is so important:

  • Honesty results in closer relationships – if employees are honest with each other, they can develop deeper and closer relationships.
  • Honesty is the foundation for trust and confidence – with trust in the company and confidence in leadership, employees are far more productive and happy.
  • Honesty nurtures wellness and reduces stress – voicing concerns and new ideas not only has mental benefits but it also allows employees to identify problems and work better as a team.
  • Honesty fosters an environment for self-accountability and responsibility – if your employees feel safe to be honest, they will be more willing to take on more responsibilities and to hold themselves accountable for their work. As you can imagine, this results in better individual performance but also as a team.

Honesty is the best policy

As the saying goes, honesty really is the best policy in the workplace. It has major benefits for all your employees and your business as a whole. While working with family members promotes honesty a lot more naturally than working with non-family members, fostering this same environment should be a goal for every business.

Girl holding a wad of money

How can I increase my profit margin?

As author Dough Hall correctly put it, “if your profit margins arent rising, chances are your company isnt thriving.” Makes sense when you think about it. If your profit margin is the actual money you get to walk away with after a transaction (your revenue minus your costs), you want to be continually improving this number.

To help you increase your profit margin, especially at a time where you’re unable to increase demand, here are 10 strategies that you can start with.

Raise your fees

This is the most obvious way to increase your profit margin as the more money you make on each sale, the wider your margin. If you haven’t raised your prices in a while, consider doing so.

Reduce operating expenses 

Think about how you can streamline your operations to reduce costs. Can you lower your overheads by reducing wasteful spending? Would you benefit from automating administrative tasks?

Upsell services to existing clients

Your clients already know and trust you, so they are going to be significantly more receptive to other offers that you have. Upsell your other services that they could benefit from and you’ll see this is a great way to improve your profit margin.

Increase the productivity of your staff

Increasing the output of your staff is a great strategy to increase your profits. From setting the right targets and motivating them to training your staff and helping them develop the right skills, you can do a lot to boost their performance.

Identify and fix bottlenecks

In which areas are processes too slow? In what areas is there waste in your business? Bottlenecks cost you money and decrease your bottom line so comb through your processes and see what needs to be improved. Examples of waste are not utilising talent, waiting for work from others, and poor communication channels.

Invest in savvier practice management software 

While cloud-based systems and software cost initially, they can save a lot of time and money when it comes to those administrative and manual tasks. If you train the right staff on the right software, things like client enquiries, relationship management, email management, invoicing, and social media scheduling become a lot less painful.

Improve inventory turnover 

Markdowns are known profit-killers, so avoid them at all costs. One way to do this is to better manage areas like inventory. Review your inventory turnover and make better decisions around purchasing, sales and marketing, and you’ll reduce the need for markdowns.

Increase the perceived value of your brand 

You need a strong brand, one that centres around the emotional and lifestyle values of your target audience. If you have a brand that connects with your audience and you position yourself as the go-to-expert, you can charge a premium for your services.

Improve your bottom line

You don’t have to make drastic changes to increase your profit margin and it’s not all down to increasing your demand either.

The best way to continuously improve this number is to make effective tweaks to your business over time. They may seem like small changes in the moment, but these all build up and pave the way for wider profit margins!