Business with Friends
October 9, 2015 Leave a comment
Just because you want to go into a business operation with a friend doesn’t mean it’s necessarily a good idea. But it can be, if you think it through and do it correctly. Chemistry and trust don’t mean you’ll be great business partners, but don’t rely on them, and don’t make assumptions about how you or the other person will behave. So how do you engage in a successful business venture with a friend?
Firstly, as mentioned above, don’t make assumptions that the other person wouldn’t do anything to hurt you—or that you wouldn’t do anything to hurt them. Friendship and good feelings will not always come first. Ask pointed questions—think about your friend’s business track record, if they’ve ever made bad decisions, or lost partners. Their past behavior may tell you what it will be like to work with them now.
Evaluate your partner’s and company’s abilities. Just because your friend says that they can do something doesn’t mean it’s true. Look into their resources and capacities so you know exactly what they have and what you’re in for.
Think about other options. Working with a friend could be great, but it’s important to know if there are other—potentially better—relationships to open for a new project. Don’t let your rose-colored friend-glasses blind you to more promising opportunities!
Most of all, do what you need to do to protect your company. You’ve put a lot of time and work into it, so don’t let it fall because you didn’t do your research. Get everything in writing, form a solid plan, and create a fair division of rights and duties. That way if something goes awry, you’re protected. So don’t be surprised if your partner does something strategic out of self-interest; likely, it isn’t personal—that’s just business.
Really, to make a business venture work with a friend, you need to think it through, write everything down, and use good management practices. Friendship and trust aren;’t enough to hold up a deal, but good communication, honesty, and transparency are. Good management breeds good products, even with friends.