Starting a business by yourself can seem like a really scary thing to do. Often, it seems like starting a business with someone else is the easier option. Mixing business and personal relationships does come with its own set of challenges though. Here are some tips before you begin any business venture with your friends or family.
Tip #1 - Create clear roles
Presumably, if you’re planning to start up a business with someone, you already have the idea established. At this point, you need to be clear of each person's role in the business. Without this, it can be a slippery slope where there is an uneven distributed workload and a relationship can disintegrate.
One way to establish the roles of each person is to create a list of all the jobs/tasks/departments in your business, regardless of people. Once you have those job roles unlined, you can delegate between yourselves.
It’s also important to establish your shares in the business. If it’s 50/50, then you need to be clear how a decision will be reached if you have a difference of opinions. It may be the case that you agree if one party were to disagree, then you would not proceed. However, that can grow complicated so it is always wise to have someone who will have the final say, meaning the shares would be 51/49.
Tip #2 - Draw up a contract
Once you have the roles clearly defined, it’s time to make it official. This is where a lot of people go wrong as they presume they will always be able to trust their family/friends. No matter who you work with, you should always have a contract. This way, the relationship and rules are clearly outlined. It allows for peace of mind knowing that there isn’t the possibility for drama and allows both parties to focus on pushing the business forwards. It also avoids any financial disputes, which is one of the biggest causes for these kinds of relationships to break down.
You can get a contract drawn up professionally but that does cost money. As you’re most likely just starting out, you’d want to keep costs to a minimum. The best option is to look online for some free templates. You can get a general idea of what needs to be included. The good thing is, you aren’t employing each other so as long as payment is clearly set out as well as termination, and duties, you’re good to go.
Tip #3 - Keep meetings professional
So again, the trickiest thing is maintaining a clear line between your professional relationship and your personal one. Don’t let them creep into one another. That’s not to say your professional relationship can’t be friendly, but it means not to blur the lines. Basically, any disagreements you have professionally, should not impact your personal relationship.
The best way to keep a professional relationship is by having a designated meeting where you discuss business related topics. Here you can write up agendas, your meeting minutes, any follow ups, etc. Starting this from day one means that your professional relationship is starting on a strong foundation and you are setting good boundaries.
These three tips should help give you a stable start to our new business venture and should allow you and your business partner to progress together securely. If any three of these things proves difficult, take it as a warning sign. If your family member/friend doesn’t want a contract, make sure you understand why. Every business will utilise contracts at some point so why not from the start? If they can’t keep a professional relationship, is that someone you want to work with and are you willing to ruin a friendship if things don’t go well? Can they dedicate time for the business? These are three simple tips that any business partner should be happy to abide by.