How a Poorly Managed Addiction Can Destroy a Family Owned Business

How a Poorly Managed Addiction Can Destroy a Family Owned Business

Mitzy Perdue, the daughter of one of the cofounders of Sheraton Hotels and the wife of late entrepreneur Frank Perdue, recently wrote a chilling overview of the state of family owned businesses throughout the United States. Mitzy said that substance abuse problems are crippling family owned businesses. As the opiate crisis becomes more severe, the problems will likely escalate.

How does substance-abuse have such a profound effect on family businesses?

The problem is the problems of substance abuse with family owned businesses are often overlooked. One of the biggest reasons for this is that the stereotypes about addicts cause people to think that motivated and otherwise highly functional people are immune to the disease. Unfortunately, that is not at all the case.

Most people would be surprised to find out that family owned businesses are more at risk of substance abuse problems than the average person. The figure is shockingly much higher. One study found that 54% of family owned businesses have at least one family owner or employee that is affected by the turmoil of addiction.

This can create all kinds of problems, including:

  • The emotional pain of loss. There are many ways that addiction can lead to devastating losses. The most painful losses are obviously when a family member loses their life to addiction. Loss can also manifest in less tragic, but also very painful ways, such as broken relationships and separation due to time in rehab. This pain can be very distracting to anybody operating a family business.
  • Expensive legal costs. Substance abuse problems often lead to expensive civil and criminal penalties. A person suffering from addiction may need to spend thousands of dollars on fines, bail or legal fees.
  • Quality of work atrophies. High functioning addicts are few and far between.  Almost everybody suffering from a substance-abuse problem is going to find that the quality of their work will deteriorate over time. For family owned businesses, this can be financially devastating in many ways. The person suffering from the addiction may not do the work they are supposed to, constantly let clients down or represent themselves in a way that tarnishes the company image.
  • Embezzlement. People suffering from addiction may go to drastic lengths to find their vice. This can even include stealing from their own family. If they have access to company funds and assets, they can they can bleed the entire business dry.

The financial consequences of addiction can be frightening.

What do you do if somebody working in your family business has a substance-abuse problem?

If somebody in your family business is suffering from addiction, then you need to follow these precautions.

Be firm but nonjudgmental

Your family member needs to understand that you support them, but not their addiction. They are more likely to recover if they know you have their support. At the same time, you need to set clear ground rules to keep their addiction from infecting the rest of the company.

Offer to assist with rehab costs to the best of your ability

Rehab centers such as Harris House can be expensive, but it is a worthwhile investment to save your family member and the business. Your family member likely does not have sufficient funds to pay for it, since their addiction has been so costly. You are going to want to consider paying for it if possible. If you don’t have the money, there are other ways you can try to help them fund it.

Know went to demote or terminate employment

Nobody wants to fire their own family member. Sadly, it is sometimes the only recourse. You need to think about everybody else that is in the company. You can always offer an olive branch, such as a chop with fewer responsibilities to salvage the relationship and minimize the risk of worsening their downward spiral.

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