How many times have you heard about friends going into business together and having it be the end of the friendship? It doesn't have to end that way, even though it often does.
It can work if:
- You share a vision.
- You agree on a strategy.
- You agree on a financial plan.
- You have complementary skills and competencies.
- You each value what the other brings to the table.
- If one brings money and one brings expertise or contacts, there should be a clear statement of the value of the non-monetary contributions so resentment doesn't build over time.
- There should be an understanding of each person's willingness to sign personal guarantees or put in additional money.
- There should be a clear understanding of how much risk each is willing to take.
- You can separate business and friendship.
- You have job descriptions.
- You take all of the precautions you would take in going into business with someone you do not know well.
- shareholder agreement
- employment contracts
- issuing shares
- clear policies and procedures
- clear understanding of the limits of individual authority,
- You have clear and distinct areas of responsibility.
- You keep lines of communication open and have continuous communication.
As you can imagine, the above represents a lot of preliminary work, probably a lot more than most people even think to do. Business is a serious venture. While it might be fun to work with a friend, this fun is still serious business.
Think about it as business first, fun second. It can work. It can be fun. But do all you can to maximize the possibilities.
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