Should you start a business with friends or not
Should you start a business with friends or not
Should you start a business with friends or not: When it comes to earning a stable living; a job or work security is essential. Whereas when it comes to mixing work with friends or family; well that’s a road which may be bumpy, straight to the finish or you may end up at a cross roads. In Pakistan when one has this query whether to start something with their friend or friends the general answer we get is, “Bhai , bhai ka ni rheta, dost to dur ki bat hai” which means you can’t even rely on your biological brother when it comes to working with or for them. Well the resultant may be a blissful route which proliferates work as well as friendship,; where as it can also have a very short expiry.( Should you start a business with friends or not).
Things to consider before Starting a business with a friend
My personal experiences have always ended up in dismay when it came to such transactions. In some cases the friendship was intact where as the work went down the drain. In other cases friendship and work both ended on a null stage. Mixing friendship with business should be like a married couple; where we should overcome each other’s shortcomings. Business Partners with different skills sets should complement each other’s work rather than undermine each other. Well in real life scenarios we have exemplary success stories and also many dissatisfied friends. It is heart wrenching when you see the true colors of someone who you know everything about, but out of nowhere comes a massive blow. This makes you question all the decisions in your life and how they lead you down this dark path. (Should you start a business with friends or not )
Choices you can opt for when you decide to start a business with a friend
A Sleeping Business Partner: A sleeping business partner is such that invests his or her money but does not take part in the day-to-day operational decisions. The issue here is obviously investment is prerequisite to start any business but still time is also of the essence. The ability to preach that time = money may become distorted with time. In the case something goes wrong the partner running the business would be blamed for losing out the investment. If things go well the sleeping partner may want more stake of the business and play his or her bargaining chip of revoking his investment. The solution to this is a proper contract that assigns each partner their roles and be familiar if they decide to walk away how may the investment be divided. Starting a business with a friend on these ground also may end up with the same problem, when money comes in to the picture relations are dragged and dropped from the frame.
A Business where the friend has a higher stake:
Many at times one partner brings more to the table then the other. This gives them a sense of superiority and they may try to make decisions solely. To avoid this the partner who is investing less should with time retain his earnings and complete the investment so that it same as that of the partner. This will reach equal grounds and conflicts may be reduced. A friend knows your deepest darkest secret so obviously they know your financial standing. Still this issue exists.
A 50/50% partnership:
This partnership seems to be the most reasonable one. Stakes are at par and the goals are aligned. Still if an issue arises and business partners don’t see eye to eye a dissolution is possible. When opting for such a partnership one should device a contract (partnership agreement) with such stipulations that do not allow the business partner walking out to claim his or her investments. The idea should be to work through thick and thin like friends should do.
I saw a lot of people making it work #BusinessWithFriends
— Harry wakaMvuleni (@mnisi_harry) February 2, 2016
Working for a friend:
This is where things may start getting messy for both the parties. The employee would want to share the same understanding and bond with his or her boss as it was before. The employer or boss may be conflicted on whether to treat his friend with the same openness or be stern when it comes to work. When push comes to shove things may go haywire, the employer may think the friend is taking advantage of him and the other employees may think that this person is getting preferential treatment on account of his relationship. The rule should be that behind office doors friends should be colleagues or employees and outside the work environment they should not reflect on what happens inside ( Should you start a business with friends or not ).
Prerequisites of starting a business with a friend:
- Draw up a contract
- Decide on roles and responsibilities
- Make sure that the rules and contractual obligations are not breached
- Complete transparency at work
- Have a clear distinction between work and friendship.
- Have an exit strategy in place if things don’t work out
— DHAVAL (@dhavaljshah) October 8, 2015
Working with friends or family can be a bliss if executed properly. There are a few steps that should be taken to assure the partnership does not rattle and phase out. For starters the main motive for starting with a friend is trust, you know each other well and are certain that things won’t go wrong. Well regardless of how good your friendship is a binding contract is a necessity. I have always taken a leap of faith when it comes to working with a friend and have never jotted down a contract; well it always blew up in my face. Once all the rules, regulations, stakes and obligations are written and signed, the partnership commences. To keep this intact, partners should have their goals and motivations aligned. The business partners know their strong suits and should let each other function in that particular area of expertise. One of the main things is complete transparency, you should correspond about each and every thing to be on the same page. You need to make sure that the contract stipulates what may happen when a partner walks out and how his or her investments may be dealt with (Should you start a business with friends or not),
Is it wise to Start a Business With a Friend
— Destiny Magazine (@DestinyConnect) November 15, 2014
To sum up both areas hold significant importance in one’s life; work and friends. I feel they should have jurisdictions and should not be mixed as end of the day you may end up with no business, no stability and also no friend you can count on for a shoulder.
Why You Should (or Shouldn’t) Go Into Business With a Friend