Article Contributed by Lisa Michaels
Starting a business is an exciting, yet stressful, experience. Businesses are formed in many ways, some of which are joint ventures. These business partnerships can occur for a number of reasons, including a lack of skill sets, poor connections within the industry or not enough financial resources. Many times, the people who form a business partnerships already have a personal relationship, such as a friendship. Although this can be rewarding, it can also be challenging at times. Businesses built between friends are most successful when emotions do not get in the way, which is done by keeping business practices as impersonal as possible.
This article will explain some of those challenges and how to avoid many of them by planning ahead through successful business practices and reasoning. First and foremost, it is essential to make all decisions with the company’s best interests in mind. This can be done by establishing ground rules so that when a problem arises, common issues and negative outcomes can be avoided.
Define Specific Roles Clearly
One of the good things about starting a business with a friend is that it allows you to know much about each other, which includes specific strengths as well as specific weaknesses. Because friends have a good rapport, these should be easy discussion points when forming a business. In many cases, these roles will often define themselves naturally as friends know what each other do best. Other cases might be more difficult, because many friends have not worked together before and may not know each other’s professional aptitude and skills. That is why it is crucial to have this conversation when forming the business.
You must have everything defined clearly before embarking on this professional venture. Strategy plays a big part in the designation of responsibilities. For example, the partner with great communication skills should assuredly be the CEO, or Chief Executive Officer, which would handle communication with other companies and clients. If the other partner is better with day-to-day operations, he or she should take the role as COO, or Chief Operating Officer. Once these roles have been designated, it is best to write them down so there is a guideline set in stone that cannot be changed. This will allow the business to be organized from the start.
Always Keep the Communication Channels Open
In any business, especially one that is formed with a friend, it is important to keep the communication open and honest. Rules must be set in place to ensure business flows fluidly and successfully. Rules should include regular meetings with constructive discussions about the direction in which the business is moving.
Although the business was started because of a passion that you share, you will probably not see eye to eye on all decisions. For this reason, communication is crucial to the success of the business. For example, you both came up with this great idea, but have not yet figured out exactly how to set it into motion. Your visions might diverge, which is why you have to talk them through, resist the urge to impose your wills, and try to make a compromise. Ultimately, your idea must go through a testing phase, which may include product trials or surveys, to make sure it can be profitable as well as functional in the marketplace.
Talking through these crucial decisions at regularly scheduled times and coming to mutually agreeable terms will help strenghten your personal relationship and benefit your business.
Always Make the Business the Top Priority
When everything is coming up roses as far as business is concerned, it is easy to maintain a positive relationship with your business partner. Unfortunately, this is not so easy when the going gets tough. It is important to keep in mind that, once in a while, you will have to make difficult decisions that you will not like to make.
It is necessary to always put your business’s best interests first, and there is no place for big egos in a business partnership. For example, it is hard to give and take orders from friends, but it is part of a business partnership nevertheless. In order to avoid such situations where one of you seems to be bossing the other around, make sure to gather the entire team at a regular basis and discuss weekly accomplishments or issues, and set a plan of action for the following week. It can alleviate some of the stress related to the personal and business relationship struggle. Keeping this in mind will allow things to flow much more smoothly.
Make All Plans in Writing
In the unfortunate circumstance that the business does not work out or that the partnership splits, there must be written plans of how to handle these situations. It should include how assets are to be divided and what would happen in the case that one of the business partners leaves the company.
Consulting a lawyer to draw up the document is a good idea to ensure its legality. An attorney will also help you to cover all bases in the case of any unexpected situation. Planning ahead will alleviate much stress for future issues.
Value Your Personal Relationship
When people are friends, it is because they have common interests and goals. In a business developed by friends, these qualities are benefitcial for the company. It should promote positivity and strong morale within the workplace. It can also help to build a strong team and keep loyal employees around the brand. Remembering what brought you together will help in stressful business situations.
In conclusion, starting a business with a friend has both positive and negative attributes. It is never a good idea to enter into a partnership simply because it seems fun. If your friendship is strong, and you complement each other professionally, a business venture can be successful. But you must consider all the parameters before making a final decision.
About the Author
Lisa Michaels is a freelance writer, editor and a striving content marketing consultant from Portland. Being self-employed, she does her best to stay on top of the current trends in the business world. She spends her free time trying out new recipes or reading Scandinavian crime novels.