There are many advantages to working with friends. The same passion. Two heads instead of one. You can bounce ideas off each other. Spending time together is easy. Longtime friends know each other well, the positive and negative attributes. These may all be the right ingredients to go into partnership together to create a business.
But one always has to be cautious. Having a disagreement over money decisions can hurt the business. It could ruin your friendship. This is also an issue if you partner with a family member. Same issues. What do you need to know to make sure your business and friendship don’t end blowing up, being a disaster. You don’t want your business to be the ground for friends or family squabbling.
As an example, my partner, Gillian and I are family, we’re sisters. But we like to think of ourselves as friends. So, we are doing business as both family and friends. Double whammy. In our early business development, we made a pact, “If business disagreements interfered in our sister relationship, we would dissolve the business”. It was that important to us. Our families would suffer otherwise.
We instituted a series of guidelines. It spelled out each person’s responsibilities and authorities for our business. We wanted to avoid a potential friend or family feud or a business breakdown. Sometimes we have to be flexible. Not always get our own way. But we have been partners for 4 years and we love working with each other every day. We are working hard but having fun together. We have the same interests, so our business and personal lives are never boring. Rarely does a day go by when we don’t have some form of communication. Our husbands worry we will get sister withdrawal if we go more than two days without chatting.
But here is some advice that we would like to pass on. Things we have learned from our own experiences and mentoring given to us.
Five Things to Help Working with Friends:
- Make a list of all the major decisions that you will encounter. Decide which of the two of you will get ultimate decision making if you don’t agree how to handle something.
- Some of our toughest discussions are keeping friendship and business separate. We have to stay focused. Make a pact, that this “time” is for “work” only.
- On the opposite side of that, leave work talk for business hours. Be friends or family outside of the office.
- Don’t commingle monies. Set up a business account. Only business expenses come from that account. It’s not for personal use.
- Decide who will be responsible for which roles. Who has the best talents for accounting or marketing, or the desire. Then make sure you keep clear who “owns” those roles.
We have seen many husband and wife teams. They might have started off as business partners, then got married. It always looks exciting to see them working together. But divorces happen. How do they deal with it? Same way as any family or friend. Create a plan in advance. Like a prenup but for their business enterprise.
If you hire family members like spouses or kids, you face other issues. Write a business plan in advance. It should outline all the important things to consider. Determine income, percentage of business, who to hire, roles in advance.
If your business includes friends with family, you have to be extra careful. Don’t put yourself in a position of choosing between family or a friend. That would be a terrible situation. You may not recover in your relationships.
This also applies to having friends or family being clients. Do they expect discounts? What if you don’t meet their expectations? I don’t have a magic pill to answer those questions. But I do caution you to try and keep everything on a professional business level. Its ok to give them discounts but have a clear understanding of how that will work. They will want the same service as your regular customers. Find the balance with that.
We encourage you to work with your friends. Work with family. Have family and friends as clients. Nothing is more fun than having family or friend small businesses today. But please make sure you do not neglect an operating plan or agreement. Keep the sanctity of your family or friends, whether they are business partner or clients. Like Gillian and I, you can take all your talents and meld into a fabulous business that will serve you well.