As an entrepreneur, I have run into times when my friends and family members have expressed interest in my work and have wanted to work with me as a partner, a provider or an employee. While I love my friends and family very much, I always doubt if doing business with them would be a good idea.
Could business with my friends affect my personal relationship with them? How can I manage a business relationship with a personal one? Is it possible to successfully do business with friends and family members?
In order to get to the right answer as to whether I should get into a business relationship with my family and friends, I need to address a few more questions
1. Can I Trust?
If I can trust a person as a friend, it does not imply that I can trust him/her in my business relationships as well. My friend has been there for me in all my ups and downs, but my business is a separate legal entity altogether. I need to earn returns for my investors and do what’s best in the interest of my business. And that’s the only thing that I should base my business decisions on and not on the trust or personal relations.
2. Can I Be Impartial?
Can I treat my friend just as my other business partners or employees? How can I help my friends without affecting my business relationship with other stakeholders? Treating business relationship separate from personal ones can be critical at times. I am answerable to my business partners and investors as well.
3. Can I Be Thorough?
Do I need a written business contract with my friend? I use legal and written contracts with all my employees, clients and investors. It is only fair to have everything written down for the sake of good business practice. Being thorough in my business practices should not affect my personal relationship with my friend.
4. Can I Question?
I do not want to be a pest asking for work all the time but can I check in with my friend on the status of the work like I do with other employees and business partners? Will that in any way impact my personal relationship with him/her? Strict timelines and deliverables are important part of any business. Last thing I want is to ruin my personal relations because of a deadline!
5. Can I Make It Public?
Am I comfortable making all aspects of my business relation with my friend public? How does this affect me and my friend personally? It may be required to share all transactions like finances, payments and tasks performed by my friend with the other stakeholders. I don’t want to run into legal problems by being secretive or doing financial favors to my friend.
To run my business successfully, I have to comply with good governance practices like setting limits of the quantum of my business with related parties, not offering preferential pricing to friends and family and disclosing all related-party transactions to my investors. Doing business with friends and family calls for both personal and business responsibility but I need to – Keep Business First.
Answering above questions may not determine if doing business with my friends and family could be a success for sure, but I may be able to talk out to myself – who is the best fit for doing business or if not, who is definitely not the one. So, I can avoid ruining a personal relationship by pushing it into a business one, while I can!