The Do’s and Don’ts of Going Into Business with Friends
Starting a new business can be a thrilling and educational experience, and many times our ambitions overshadow the realities of what it takes to run a successful business. Particularly volatile can be a circumstance in which you are engaged in a business with a friend and disagreements arise. Without proper planning and collaboration, a once seemingly fruitful opportunity can turn into a nightmare, leaving you and your partners frustrated, jaded or even worse: no longer friends. By following these simple tips, you can avoid the pain and unnecessary problems that could arise otherwise.
DO Determine the Ground Rules
When it comes to making decisions as a business, there has to be a procedure in place that deals with occasional disagreements. One example is whether or not your business should purchase advertising in an online format: one partner may be supportive of the idea, while another may be totally against it. Since the budget (and therefore, profit) belongs to both of you, how will this disagreement be settled? Establishing a system that can be used consistently to make the tough decisions and to “break” any ties in the decision-making process is vital to keep a company operating and its owners amicable with one another.
DO Create Exit Clauses, Job Roles
Having a clear documentation of what each person’s role will be in the day-to-day operations of the business will ensure that no toes are stepped on and that every person involved is contributing their needed amount – without overdoing it or being perceived as “slacking off”. If one owner is to be the general manager of the establishment while another will serve in a more behind-the-scenes approach, documenting these responsibilities is not only vital for success but a great way to prevent conflict. There also needs to be ample documentation on what should occur in the event one or more partners decide to go their own way. Will the business be sold as-is, or will the partners who are leaving be paid a certain amount based on the value of their share of the business?
DON’T Make Excuses for Friends
Chances are you already know the friends with whom you are considering starting a business very well. You must ask yourself: are these people dedicated, reliable and easy to communicate with on major issues? If you have answered no to any of these, then your business may be doomed from the start. Some people are not capable of working well with others, while some may find it difficult to communicate effectively with other owners. These problems will only grow in a business and over time, will overshadow any success you may have.
DON’T Make Major Decisions Without All Parties Being Involved
If you are considering a new website for your business (Tip: Pingler’s Link Popularity Checker will tell you how many visitors are coming to any page), do not make the decision on your own. Anything that relates to the allocation of resources should be discussed – at least initially (you don’t have to tell everyone that you are buying paper plates when they are in constant use) – with all members of the business. The more discussion that occurs, the less likely there will be a problem among partners and friends when the project is complete.