Doing business with family and friends, how not to blow it

Do you remember the scene from Friends, when Ross enters the coffee house after his break up with Emily and announces that he got evicted from the apartment and is officially homeless?


His

Who needs a lease when its a family!!"

is epic and is a perfect depiction of how it all can go down a drain in a moment.


We all know that doing business with family and friends is a tricky thing and there are people who stay strictly out of it but I'm not one of them.


Did it always work out well for me? No.


Am I naive to continue doing it? Maybe.


But I still believe that it is possible and everyone can benefit, even thrive on it.


Hear it from me


The only 3 times that I've run into money disputes was the 3 times that I have worked with a friend:

1) My first business when I invited a close friend of mine as a partner

2) My first consulting client and the friendship we developed

3) Coaching a very close friend of mine


Lack of boundaries


The reason these 3 interactions went to pooper at one point of time was the lack of boundaries, the line between the business and friendship becoming too blur and neglecting the formal part.


There were never bad intentions involved, yet feelings got hurt and people offended. (No worries though, we managed to stay friends in all 3 cases).


Learn from my mistakes


(and don't be like Ross)

Here is a rundown of things that I learned the hard way from my own experience of doing business with friends and family, I hope they will help you stay out of trouble and a drama:


1. Write it down, write it down, write it down!!

I don't care if it is your husband, mother, brother or a best friend, always write it down.


How much do they own? Roles and responsibilities? What happens if one of the partners wants to walk away from the business? How will shares be calculated, royalties, etc.


Get clear on your personal objectives and expectations. Agree how can one get out of the deal.


2. Treat it like a business


Sometimes it's hard to draw the line and you need to be vocal about it.


"This is how I work with clients, this is the extra mile I go for you.."


They might not even be aware of the additional effort and time you are putting into this professional relationship. Even though you still get the benefit of the doubt, treat with care and attention.


3. Keep track of everything


When things are good, everyone is happy. When things get tough the blaming game starts. You need to be straight in your shoes and be ready to make your case if necessary.


Keeping track of expenses, time and jobs done covered my ass on multiple occasions.


4. Temperature check


Check-in regularly with your partner.


How do you both feel about the collaboration, are your expectations met, is it still considered beneficial and fruitful? Does it make sense to keep going?

5. Walk away

If things go south and you still want to save your friendship, walk away when you can. If you haven't done your job to get the paperwork straight, it is equally your fault as it's your partners.


Find a deal you can agree on and cut your losses. Next time you will know better.

This is how I managed to remain civil during my second dispute and keep a friendly relation with the client afterwards.

In the position of a consultant, I should have known better to update our paperwork when my scope went extensively larger and deeper and I invested my own money.

6. Say NO


Sometimes it's just not meant to be and even if it all looks great on paper, your personalities, lifestyle or expectations are just not compatible.


Say no from the start and spare yourself the trouble.


Presume positive intent

This is a huge one!


I want to share with you this amazing podcast that has stuck with me.


A story of 4 friends having an idea and creating a startup while working full time.

A company that 2 years later - early 2015, was worth $1.2 billion and had distributed more than a million pairs of glasses.


The entire podcast is a true value bomb and I recommend you to listen to the full 35 min of it, but if you are impatient, I want to bring your attention to the part between the 6th-9th minute that talks about how to remain friends through the process.

Listen to the podcast on Spotify:

The Ultimate Customer Experience | Warby Parker Co-Founder Neil Blumenthal on giving customers everything they didn’t know they need


Read about the start-up:

How four students turned the eyewear industry on its head


Did I miss anything out?


Good luck with your ventures,

Alena

xx

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