How to Fire a Family Member in a Family Business

You know the time has come to fire a family member if the person is not serving the needs of the family-owned business. You may have inherited the relative as an employee through succession, or newly hired a friend or family member with hopes for success. 

Sometimes needing to fire someone can be as simple as recognizing they are not pulling their weight, not showing up for work, or are frequently late. Often though the problems can be more difficult to communicate and pinpoint. This can be a gut feeling you have, you are hearing rumors from employees, or you notice the behavior and attitude of the family member at work is not in alignment with your company culture and values. 

Whatever the reasons are, you know you need to go through with firing a family member from your family business. Don’t despair because I have 4 steps to guide you through the process.

Step 1 Find The Right Reasons To Fire Your Relative

Do your due diligence. To have a healthy, constructive conversation with your relative about why it is time for them to exit the company, you need data, and clear evidence to back your concerns and decision. Assemble documentation to substantiate your beliefs and keep it on record in the person’s file, even after they have left the company.

Here is the data you will need to look for, which ultimately will make this firing process respectful and fair to both parties.

  • Compare the KPIs of the role with the actual performance. 
  • What are the strengths, skills, and interests of this person?
  • What are their knowledge gaps, blind spots, and energy drains?
  • Does this person understand the job?
  • Does this person want the job?
  • Does this person have the capacity for this job?

Step 2 Identify a Path for Success

Not only is this person a family member, but the reasons you have discovered your relative is not performing well in the job may not be due to a lack of effort on their part. Not being suited to a company culture or underperforming in a role can be due to a host of different factors.

In order for your relative to be set up for success in the future, you can consider the following points for how you can create a positive experience and opportunity for them to grow and move forward. What they do with that is up to them, but you are paving the way for success.

  • What does this person need to succeed?
  • Introduction to other people & opportunities?
  • Research the possibilities.

Step 3 Create a Framework for the Conversation

Going into a potentially difficult conversation with a family member could easily go off-topic, therefore having prepared yourself ahead of time can keep the conversation focused and directed toward the ideal outcome. Firing a family member can be achieved through a compassionate process.

Here are the questions to consider before the meeting.

  • What is your ideal outcome?
  • The leader needs to decide if the conversation will be focused on the relationship, the company, or the performance.
  • Who do you want to be during this conversation? Be intentional with your voice. For example, do you want to be calm and reasonable, and what role do you choose – sibling to the company President or your business title and role? 
  • Identify the relevant points to focus on and stay on topic. Here you will use the data and research you’ve done and the current performance metrics of the family member. You do not want to get derailed by your shared family history.
  • Paint a clear vision of a successful future that is separate from the organization.
  • While the conversation may be made in segments, ultimately there must be a plan with measurables & dates of completion.

Step 4 Implement & Execute the Separation Plan

Planning and preparation are key in firing a family member from the family business. A plan can only be successful if it is implemented and executed. In Step 3 I identified you must have a plan which includes metrics and milestones, with a completion date. This will keep you on task, and focused while creating a process to guide you through any challenges that may arise. 

  • What is your timeline for firing the family member? Consider the impact on the business, the human resource legalities, and process requirements.
  • What are the stages of your plan? identify the milestones. If milestones are delayed, what is the impact?


The decision to fire a family member and follow through with implementing the plan can be a challenge. Preparing and planning for success through gathering data, supporting the individual to find a path for future success, identifying your ideal outcome, and following through with the plan specifics will make it a much easier process for you both. Going forward, reflect on what you would change in your hiring process to prevent having to fire family members and employees in the future. 

Additional Resources

Patterson, K. et al. (2022). Crucial Conversations: Tools for Talking When Stakes are High, Third Edition. McGraw Hill: New York, NY.

Scott, S. (2004). Fierce Conversations (Revised and Updated): Achieving Success at Work and in Life One Conversation at a Time. Penguin Random House: New York, NY.

Feeling Hesitant?

Are you still putting off firing a family member when you know it needs to be done? Worried about doing this on your own and how to manage feedback from the rest of the family after you fire a relative?

I can help. Looking at unique factors in your situation, finding data, and coming up with a plan while supporting you to manage the pressure you may be feeling, are just a few of the ways I am qualified to assist. Click the Discovery Call link below.

Wendy Dickinson

About the Author

Wendy Dickinson is the founder of Ascend Coaching Solutions LLC, a coaching firm that specializes in working with business owners and executives who plan to expand their leadership capacity as their business grows.

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