Why running an entrepreneurial business is like managing a family

Great article from Richard Branson's blog 

It’s inevitable that in smaller businesses, relationships within the team are close. While that can be a good thing, as a general rule of thumb, the closer the relationships the higher emotions will run. Just like families. And that means some of the politics of running an entrepreneurial business is very similar to that of managing a family.

When teams work closely together, it can sometimes create tensions that generally don’t arise in more traditional corporate environments, where professional 'distance' is often more valued than the passion entrepreneurial businesses seek to cultivate. The nature of the work fosters this culture too: where the impact of an employee’s efforts is more visible and important to the business, employees take more ownership – but also feel more personal pressure as a result.


The structure of a small business also resembles a family. While employees and owners often work closely together, there’s also a clear hierarchy of owner/non-owner just as in the parent/child relationship – ultimately it’s very apparent who’s in charge. There can be an age element involved too. As Clare Harris, CEO of Talking Tables, explains, "as owner manager, I’m older than many of the young staff we employ. That contributes to a 'family feel'."

How can you manage this tricky set of relationships then? The last thing you want is to become a dysfunctional family!

Letting go

A lot of it is about the way the entrepreneur relates to and manages their business. Most importantly they need to work out when they really do need to 'pull rank' and when they need to give their teams some independence.

This can be truly difficult process for the entrepreneur. They probably started the business because of a personal passion to solve a problem or do something better, often carrying out much of the work themselves initially. To then trust someone else to do that job as well or even better than them, is exceptionally hard. However, just like letting a child spread their wings and fly, they have to relinquish control and let them make their own mistakes.

Letting go can also be incredibly rewarding. Entrepreneurs generally worry about the happiness and wellbeing of their team, so seeing them succeed creates an enormous feeling of pride in the entrepreneur. But it‘s a major journey of personal development for the entrepreneur, and it can take a long time.


As Clare Harris says: "part of the skill in growing a company is to grow the staff around you. This can feel like helping family members to learn and develop; by mentoring and encouraging them and seeing their careers develop."

If employees are allowed to effectively push back on decisions from time to time, they will gain greater job satisfaction and avoid becoming disempowered and disengaged. Small companies that allow employees to challenge decisions and innovate, benefit from the knowledge and insight from the 'next generation'. Times change and the younger staff might know more about technology and engagement than the entrepreneur!


Working for a small business isn’t just about money, but about contributing to that 'family' unit. Strong relationships within the team produce greater loyalty and a better work environment. That’s great for recruitment and retention, especially as it corresponds to changing trends in employee expectations. More than ever before, people are looking for meaningful work, something beyond just a wage cheque.

Lee Carlin, Co-Founder of The Intern Group, has certainly found this to be the case. "When building small teams in the early stage of growth, loyalty and focus is key. We have found that recruiting people with prior personal relationships has been a great tool in growing the business through the various hardships and pain points. It is easier for staff to buy into your mission and values if they believe in you and we are sure that our family values have helped us grow since our inception in 2011."

Likewise, Adam Greenwood, MD of digital agency Greenwood Campbell, explains that their close family atmosphere means his team constantly strive to be the best. "They are always working above and beyond for the company. We have extremely low staff turnover rates, making huge company savings in recruitment costs."


So the culture that develops in a company is important, but so are the processes. Just as children need clear rules and boundaries, so too do teams benefit from clear guidelines and processes. That supports the integrity of the business and the quality of the product or service offering, but it also enables staff to get their jobs done properly, and creates the support and environment that teams need to thrive.

Relationships get strained easily in entrepreneurial businesses because of the passion, the closeness, and the excitement. If you work for an entrepreneur, you might roll your eyes like a teenage child at them but you know deep down you really love them! And if you are the entrepreneur, you might be afraid of losing your baby but you have to let go over time and let your team grow up and make their own mistakes.

This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details. Thumbnail from gettyimages.