If there was a single piece of advice that I might give to clients who are considering going into business with friends and family, it would be to seek out every other possibility. As an attorney who has spent a great deal of time in litigation unraveling the horrible consequences when these relationships fail, I cringe whenever potential clients think about doing this.
10 Questions to Ask Before Family and Friends Become Business Partners
This excellent article poses a series of questions that, at a minimum, people should discuss with potential family or business partners BEFORE entering into the business relationships.
The questions suggested by the article are challenging and sometimes difficult to raise, but their beauty lies in raising questions about the expectation of both sides. The excitement of a new small business and potential to make money with people you trust and maybe love can be overwhelming. As a result, decisions to go into business together are often made for the wrong reasons. Or even worse, the reasons for going into business with friends and family are not the same for both parties.
Challenges of Going into Business with Friends and Family
When the stress of actually doing business enters the picture, and they will, the basis for the relationship is directly challenged. If the expectations were unspoken or misunderstood at the beginning, they will come out when things get hard. At that point, because of financial and relationship issues, things are going to go bad. And the shame is if this happens, the business is at risk and the relationship may lost forever.
As a final thought, look outside your friends and family if you can. If you cannot find someone else you can trust, treat the relationship as if you were entering into a relationship with an outsider. That perspective may save your business and your relationship someday.
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