Family-owned businesses are the backbone of the U.S. economy. According to U.S. Census Bureau data, a massive 90% of the country’s businesses are family owned or controlled.

There are inherent advantages of being a family member working for the family business, such as loyalty and a sense of belonging that transcends the typical employer-employee relationship. As Mike Malley — president of Malley’s Chocolates, a family-owned business for three generations — said: “One of the greatest advantages of a family-run business is the inherent trust that comes with working with parents, spouses or siblings.”

And working together can create more intimacy and opportunities for connections. Kelly Makker opened Avatar Coffee Roasters in Santa Ana, California in 2022 with the help of her husband and sons. She said: “We feel that we became a family again through the business, and that’s also part of what we love about it.”

But there are also challenges that can come with working with family members. The ICSC Small Business Center has gathered insights from interviews with small business owners about their tips for creating and maintaining a harmonious and productive family business environment. From setting personal and professional boundaries to setting clear job expectations, here are their top tips.

Embrace Differences

“My sister and I approach the business from two very different areas, her background and training comes from the retail sales floor. She is obsessed and passionate about clothing, fashion and trends, and I am very passionate about business, finance, leadership, banking and building things. So together we make a good, formidable team. But still disagreements come up. So my No. 1 tip is you need to study and work on empathy. You need to understand the other person’s strengths and recognize your weaknesses. Working in a family business is an art. You really need to be intentional about your desire to want to be in it because it can be very beautiful, but with those family dynamics, it can also be very challenging.”

— Jordan Edwards, CEO of Mixology, a family-owned clothing boutique with 15 locations along the East Coast

READ MORE ON MIXOLOGY: When, Why and How to Grow to Multiple Locations

Respect Each Other’s Opinions

“[Our family-run business has] had our little ups and downs, but it’s helpful to have everyone involved before making any big business decisions. I have a really good support system with my dad, who has been in hospitality for years and years and years, and my mom, who’s super creative and stays up to date on all sorts of baking. We have to go through all of us before a big decision is made and I think that really helped our business. When I first was starting, I'm like: “Oh, I want to be in downtown [Cleveland]. I want to be somewhere fun.” My dad was like: “No, you don't. You want to be in a suburb. Suburbs have kids. Suburbs have birthday parties. Downtown, yes you might get a couple of cupcake orders, you might get an adult’s birthday party every now and then, but it’s nothing like kids.” It’s that kind of thinking from all angles — from my dad, the business angle; me, the trendy angle; my mom, the creative angle [that helps us make good decisions.] We are really able to rein each other in. Even when designing the shop, my dad wanted specific things that reminded him of the hotel industry, and I was like: No, no, no, no, that’s not chic enough. We got to do this.” Each of us has our strong suits and they really balance each other out nicely, and it has really prevented any failures.”

— Kelsey Shepard, owner of Kelsey Elizabeth Cakes, a sweets boutique with three locations in Northeast Ohio

Establish Clear Roles and Expectations

“The biggest piece of advice I’d give to someone working with family is to explicitly communicate their expectations. It can be awkward to be a manager or an employee to a family member, but in business, a hierarchy is necessary for decisionmaking. As long as all family members are on the same page about their roles, there’s no reason why their professional relationships can’t be successful. At the end of the day, it’s amazing to have people on the team that you know are just as dedicated to the success of the business as you are.”

— Elena Ortiz, second-generation co-owner of El Pescador, a homegrown chain of Mexican seafood restaurants founded in 1983

Prioritize Family Time Outside of Business

“To maintain our family bond, we schedule regular outings and vacations that have nothing to do with our business. Growing up, for example, my mom was always a proponent of planning family time like game nights — we called them Malley’s Olympics — or trips to amusement parks like Cedar Point. These occasions are meant for enjoying each other’s company, away from work discussions. It’s important to carve out and respect this time, reinforcing that our relationships extend beyond business roles.”

—Mike Malley, president of Malley’s Chocolates, a third-generation chocolate company

READ MORE ON MALLEY’S CHOCOLATES: The Importance of Detailed Attention to Displays

Offer Mutual Respect

“It’s not easy. It’s not for everybody. You have to be able to get along. You have to be able to bounce ideas off each other, respect each other and not be insulted and stop speaking for days. It won’t work if you do that. And you can’t have [outside voices] in there, twisting the situation up. You have to communicate. There are no secrets. It’s too small of an environment.”

— Rita Sachs, co-owner with daughter Anne Sachs Mulholland of gift store, Mulholland and Sachs

READ MORE ON MULHOLLAND AND SACHS: Running a Family Business

Don’t Skip Training

“At the second location, I have my brother-in-law. At my third location, I have my brother, and the fourth location, I have my nephew. So my stores are all run by family members. Whoever wants to open a store, first they have to work in [my original store]. Only after I think they’re very well trained and we have full confidence in them, we have them open the stores. But they know this is a full-time job that requires constant learning. They start there seven days a week, no matter what.”

— Virendra Thakkar, owner of Vishala Grocery, a chain of family-run Indian grocery stores in Texas