Is it a good idea to go in business with friends?
Going into a business with friends can be a good idea, especially if their intentions mirror yours. Friends can have strong commitments to the success of the business, thinking that if it’s good for the business, it’s good for them, too. Now while it may have its benefits, working with someone close to you can have its fair share of complications - especially if you’re frat buds or roommates. Here are a few things to keep in mind when working with friends or family:
Does he know what he’s doing?
The first thing to consider is your friend’s qualifications. Does he have the necessary skills to get the job done? And more importantly, if he wasn’t your friend, would you hire him? Consider the character of the individual rather than focusing on your personal relationship. Previous work experiences can be a factor, too, as how he behaved when working for other companies can dictate how he will perform for yours. Don’t be afraid to use your friendship to ask questions as well, as a close friend is more likely to tell you about any problems within the business, as opposed to a regular employee who might be afraid of losing his job.
Keep everything in black and white
Outline specific work and duties. This is especially important with business partnerships. Work should be divided properly, and percentages of profits stated. Terms of the agreements should be written down and signed to avoid disputes in the future when things aren’t so financially rosy for the business. When you know who’s in charge of what, it would be a lot easier to set projections and set expectations. Goals can be detailed with plans to achieve them. If a business partner opts out of the agreement, an arrangement should be made for that, too.
Business is Business
Certain friends and relatives may take advantage of their relationships with you, often thinking that you can’t cut professional ties or fire them. Especially if they’re older than you. But with written agreements and clear outlines of performances or lack thereof, you can have factual basis and properly explain why you need to let them go. This can also help dispel any envy from other contractors or employees who might think your personal friend was unjustly given a preferred position. Transparency is key to in avoiding discontent.
Grant favors only when you really need to
Almost completely unavoidable a friend will, at some point, likely ask for a personal favor. Whether you grant it or not is up to you. Just keep in mind that any clients or employee who hears of the said favor may at one time ask for the same preferential treatment for similar circumstances.
It’s about who he is, and not what he is to you
The question of going into a business with friends or not is a difficult one. But it really all just comes down to the kind of person you plan on associating with. Will they behave like “friends” or be professional with their monthly dues? If you’re sure it’s the latter, then you shouldn’t have any problems. Although, it wouldn’t hurt to have a law or accounting expert either.
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