Family/friends and money don't mix well. They will always ruin the relationship. I've seen it countless times.
If things go south at all, you risk poisoning a family relationship. Family is precious; you generally only get one family. And you just cannot undo some types of damage done to/by family members.
I know a lot of people could hire their parents or siblings and get along great, but I also know a lot of people that don't talk to whole sides of their family after a nasty blowup. One should be very cautious when mixing money and blood, and ready to walk away from one or the other in a pinch.
The problem arises when someone is irresponsible or has bad communication.
If you trust your parents and they are good with money then I think it is a great idea if they are willing to help with accounting. Good parents are always happy when their kids are successful.
Friends and other family members can cause problems even if the relationship seems good.
But, that's not to say kids should hire parents. In that case, the business dynamic and family dynamic are very different. From a historical/statistical perspective this is an extremely unorthodox arrangement, for a good reason imho.
But I agree with you, this post is just a unique case.
Lately I've thought a lot about this: If I didn't have a tax person, a bookkeeper, a good freelance web developer friend, and a business consultant, I estimate that I would have gone out of business (a third time) about five years ago. The first and second times I failed in my businesses I had none of those things. Now I'm finding even more people to share the load whenever I find myself "in the grip of my inferior function" (Meyers-Briggs talk). The alternative seems to be depression, anxiety, and everything that comes with that.
The thing in working with parents, in case they eventually are accountant, is that they can access all the figures of the company (for the good and for the bad). Another aspect to consider is dealing with weird situations. They will do bullshits and you need to tell them, as you would do with any other employee. Dealing with this is not easy and requires a lot of communicative skills and entrepreneurial experience.
"What's up son?"
"Nothing dad just need you to come in here real quick"
"It's about your career, I'm letting you go dad"
"You were an accident."
Couple quick scenarios come to mind:
"Why are you firing me?"
"I need someone more qualified. You've done good work, It's not personal."
"But I'm your mother. I changed your diapers and taught you right from wrong."
"Mom, my business failed. I have no money."
"Well, you should have thought of that when you fired me."
perfect statement.. better to place mom or spouse in a company where you can give recommendation and have contacts not in our own shop, unless you are running coffeshop (OK I guess :)
She spends 1-3 hours a day managing the stores while my dad works on his model trains. It's enough to keep her busy, have a sense of accomplishment similar to her old job, provide a little extra income - all while not cramping their retirement.
I was a little nervous at first - more about her feeling pressure to make us happy than us being satisfied with her work. However, her role is clearly defined (answer emails, return phone calls, and submitted/track orders to our supplier, etc). This reduces the chance of misunderstandings or let-downs than would be more likely to occur with a less defined role like strategy or marketing.
My dad started out as an auto mechanic and painter. He decided to setup his own shop with his first cousin and it was a disaster. They butted heads constantly. My dad sold his shares to his partner and moved on to other things. They tried it, it didn't work out, and so they moved on. Throughout my childhood our family was very close with my dad's first cousin and his family. They relationship is still strong today.
My mother and her brother had a dispute about money over fifteen years ago. They still do not speak today.
Family and friends can be tricky when it involves money, there is no question.
* Author calls this outsourcing, but I simply can't see that. If we buy that, we might as well buy that all other companies consist of CEO and a bunch of people he 'outsources' lower level things to.
"But how do you outsource something as sensitive as financials?"
Sounds like a single reason.
My mom is a fantastic freelance bookkeeper. The day I go at it alone, she's going to be my first "hire".
"Hey Ma, need you to stop hiding grocery purchases under company's funds, if you wanna keep your job"
"But I'm your mother"
"Okay, alright, just don't do it again"
"Hey babe, need you to stop buying expensive items under company's funds"
"fine, since you don't love me you can marry someone else"
Phew! Sounds like you dodged a bullet there (marrying someone lacking basic moral integrity).