When I was younger I worked in a rapidly growing medium sized family run business.…
With Friends Like These
One of the greatest joys of being human are the friendships and relationships built along the way. Sure, the old saying of a friend for a reason, a season or a lifetime is accurate, whatever way people come into your life though, it’s always a blessing to have stable relationships around you – especially as a business owner.
So what happens when an opportunity arises to mix business with pleasure?
How you choose to handle a transition such as this can be fraught with peril unless you follow a couple of golden rules.
No matter how strong the friendship, get something in writing.
Like every other relationship, when you’re taking your first steps of mixing friendship and business together all parties will be viewing the idea through rose coloured glasses. Inevitably though things will happen that will shatter the illusion of happily ever after (sorry, but it’s true!). At that point, it’s most helpful if everyone involved can refer to a document that outlines the business structure, roles, and responsibilities, and work from there.
The agreement itself does not need to be onerous; it can be as simple as a word document outlining who brings what skills to the venture, who will be responsible for doing what and, what arrangements are in place around money. All parties sign their acceptance, and voila, you have yourself a working agreement.
Whatever way you choose to document it the point is, please, please, please record it. I don’t care if your family, friends or acquaintances. Just put something on paper and sign it.
Start with the end in mind.
Still one of my favourite sayings (thanks, Steven Covey). When any business venture is starting out a key question to ask yourself is, “What is my exit strategy?” Are you starting the business to sell? To be absorbed by a larger company? Maybe you want to will the business to your kids? Whatever result you’re hoping for, making sure you have a discussion around an exit strategy and documenting it within your plan will save you considerable grief in the long run.
Oh, and while you’re documenting your exit strategy, cover off what you want for the business if (God forbid) one of you were to pass away.
Put your friendship first.
My biggest take away from all of this is simple. If anyone who will be involved in the business is uncomfortable or unwilling to create and sign an agreement of some description before you start, then, walk away now. Trust me. Put your friendship ahead of words of good intent and do not proceed.
Business opportunities will come and go, but (good) friendships are hard to find. Don’t allow an unsigned or unwritten agreement to come between you and your mates.
Creating a new business with friends can be a fabulous experience. Having comradery and the ability to share the load emotionally, financially and from a skills point of view within any new business is a blessing. But done without consideration or forethought it can be a curse that darkens your doorstep for years. By following my simple rules though, you protect not only yourself and the business idea, most importantly, you protect a friendship.
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