Trusting relatives with a business is money down the drain

I have heard this from many sources not just foreigners but OFWs and locals alike but is it really the relatives fault in many cases? Culturally people will generally try to employ family first when work needs doing, for example in our construction projects while I was back in the UK the end result though with the “let’s eat” culture with relatives is that when my wife’s parents were eating the construction workers also stopped working to sit and eat at every opportunity. End result my wife’s mother was tired from having to cook all the time as well as do the daily work and the workers end up doing about 50% of their daily work quota. There is also the obsession people don’t like to be seen as thrifty where me personally I really don’t care what people think. If they think they can freeload then call me thrifty when I want a days work that’s fine as simply they can go elsewhere for work I don’t want lazy people and I don’t want people you have to physically sit and watch over. Problem is here in the Philippines its common practice and something that isn’t going to change overnight. The other issue with that is with relatives working for relatives its unlikely they will want to correct people for being slow or not working at all as they worry about offending people.

So what is the answer? simply don’t employ relatives where possible at the same time if your looking to help relatives out get them motivated. In most cases I find motivation is difficult to get going here but it seems like a 50/50 split on those that will work and those that won’t. If they wont work don’t waste your time or money on them as they are expecting to be carried through life on your back. Personally I would advise cutting off all money as they will never change and its not your responsibility. They may tell you it is but it isn’t lazy people are all over the world and its something that sickens me in the UK with the fact as taxpayers we are stuck paying for these wasters but as an OFW you have the choice and I advise cutting off the cash. May not have to permanently as they will either sulk and have tampo or they will realise your not joking and get motivated to find work or develop a business. Either way you have to make a stand. Currently the Philippines relies on this blackmail technique to keep people in their place but as an OFW you have already gained many freedoms people back home haven’t got so its important you use them for your advantage and hopefully to the advantage of your entire family.

The other thing is looking at businesses your relatives have an understanding of and are capable of doing. No point having a net-cafe if nobody knows how to repair computers or run the thing, you will be wasting money on staff when you should be sitting family in there to make you money. Same goes for restaurants, sari-sari’s etc. People need to understand economics and how to make a business viable otherwise you might as well get your wallet out with a box of matches and burn that money.

The same goes for education as the Philippines is now still training nurses yet there is no demand for them due to the economic down turn. What is the point of spending all that money on training if it goes nowhere? can you make a farm viable instead with the same investment? Nobody wants to work a farm these days but the truth is the Philippines relies on imports heavily, locally produced goods are going to become more viable in the future especially organics. The reason being people are becoming better educated and with that will change people’s eating habits. Permaculture is also a good type of farming that allows people to use whatever space they have to produce their own foods which may not need to be large scale but the ability to subsidise your relatives daily needs which would reduce the amount of money you need to send.

Either way all I can say is don’t give money easily, its hard to earn and disappears easily, take your time on projects and not only to see if its viable but also are your relatives viable and trustworthy. If you can’t trust them to manage the projects don’t waste your money or at least look to people that can be trusted to oversee things.

6 comments for “Trusting relatives with a business is money down the drain

  1. Philip Patrick
    October 4, 2010 at 11:32 am

    This is for sure a correct article. Bad as I hate to say it, Relatives and family, here in PI and in other countries are a big no no in business. I do find it especially a big no no here in PI. To solve this problem, I have also try incentive working, instead of daily wages.. Even this sometimes does not work out. Example if you are having Masonry Blocks laid, pay by the block, and not by the day. The more blocks they lay, the more salary they earn. It ends up costing you the same if you compute it correctly.. You will find most will not accept this method of work, but its the best way. Then again, you will find some who will still just do small amounts, in which is not even equal to if they was earning a days salary. They do not have the ambition to earn more and just accept even a lower earning. Which makes your project take a longer time. So it not full prove. But by any means I agree 100% with Matt and as a Expat here. Giving to family or hiring family is a money wasted. ESPECIALLY NO LOANS TO FAMILY..

    • Tropicalpenpals
      October 5, 2010 at 6:17 am

      Family loans is something I simply would never entertain, generally if people need to borrow they can’t afford to pay it back in the first place. The piece work idea is one worth working on though as it makes sense at the same time like you said some people still wouldn’t work any faster as they pretty much just work to their own speed regardless. Generally I have got into the habit of doing most of the work myself as its quicker and a lot cheaper. People will say labour is cheap here but all I can say is a lot of the time its expensive because people work so slow in comparison to what I would want in the UK, its all relative to costs of living and finding 2 guys will take 3 days to do a job 1 guy could do in half a day is typical here and something I won’t entertain.

  2. Julietbeutler
    October 4, 2010 at 9:43 pm

    As a filipino, I would say some are true and some are not. It may depends on what you’ve experienced in the Philippines and some cases are not all the same. It depends to whom you dealing with and which kind of people you are sorrounded. My family is different and would not say that they are perfect but I can still trust them. However, I lost money from my friends, LOAN MONEY AND NO PAY BACK! they just simply gone like a dust…but im sure they will never get rich such attitude instead KARMA.

    • Tropicalpenpals
      October 5, 2010 at 6:18 am

      It is all depending on the friends and relatives. Loans is something not discussed here but I wouldn’t loan friends/relatives money anyway purely for the reason people generally here see it as a gift and not important to repay. Have you had any businesses with your relatives though as that is when you find out who you really can trust?

  3. mmaria
    October 9, 2010 at 3:05 pm

    hi matt
    so who finally had to put the foot down, to be seen as the party pooper and the stopper of the gravy train, you or your wife for the employed relatives? that must have cost an uproar.

    • Tropicalpenpals
      October 9, 2010 at 3:24 pm

      The thing is in business you have to run it as a business. Ours functions as a group at the same time its structured from the way i set it up. If people aren’t prepared to put the effort in you have to take control otherwise it simply won’t work and your going to go bankrupt. Generally ours have had around 90% success rate which is why i am still here as simply our progress is actually increasing not declining or stagnant. Also explaining why things aren’t working and if people aren’t prepared to change you have to remove them. At the same time make them aware they had the opportunity to improve things but choose not do anything about it.