Have you been told never to mix business and friendship? Or heard that its a disaster cocktail that will destroy your friendship, but despite these warnings, youre excited about a new venture with your best friend forever? Well, if you are, youve come to the right place.
Individually print your vision for the new company. Be sure to enter as much information as possible. Be clear. Do not trust your friend to think the same way you do. Think about things like how much time you will spend on business on a weekly basis, what competitors will it have and what will you do to be unique in your market? What responsibilities will each of you have? What roles will each of you have? What hours will you contribute? What is most important to you? What are your personal and professional goals? What do you hope to achieve and in what timeframe? What happens if it does not work? Do not be afraid to discuss the negative, carefully.
Clearly indicate what success and failure in your business means to you? What economic return do you need to survive during the first 12-24 months? Some people may have to go out of a new venture if it can not cover todays expenses after 6 months for cash flow reasons. For others, the size of the return on their time and money can be a factor that sees them losing interest in the business. Imagine the horror to discover that your business partner wants to attract a company that you think is good, because their expectations differ from you and you had not discussed it before you bet.
And then the money is a little. What financial capital is required to start the business? Where or who does it come from? How will the profit be distributed? How much will be reinvested back to the business and how much will the owners take as a return on their investment? What happens if you run out of money and money do you need to keep business? How will shares be diluted or other investors purchased?
What about the costs? Clearly explain what costs the business will cover and not? How much can a partner spend without consulting the other? Clearly define a process or protocol to deal with disagreements? Then is it the day problem? Who does what and when? How about when a partner puts on many hours than another? How do you handle this? What is your existence strategy? Is this a business you want to build to sell or forward? Go into business with the end in mind. Do not be afraid to discuss the tough subjects, such as What happens if one of us wants to leave the business and the other does not?
Then write it all together. Once youve decided that you have a common vision, common goals and timeframes, put together and write your mission and vision together with a memorandum of understanding that describes everything youve shared and schemed in the past days. The more details the better.
When done, find a good lawyer to help you create the most appropriate device business, trust, partnership, etc. for your business. Remember, its cheaper to ask for help at the beginning, rather than later. All warnings you hear are well founded. I have seen a number of my friends have a serious tough time together, over the business that completely tested the friendships merit. Fortunately, friendship in most cases has won, but its not always the case.
Sometimes a relationship begins as a friendship south of a business unravels, and personally I think youre better. Real friendship will survive these obstacles, but those people who friends you for sake or business or business will pass you. Make more room for those who deserve you.
Despite the warnings and stories of the judgment and the fog and the common faith that business and friendship do not mix, I have personally been blessed to have worked with my best friend for many years. In fact, I have a number of appreciated friends that I have actively raised to create business relationships. Lets face it, you know your friends better than most other people, and you trust them. Even more important, if you are a bit idiosyncratic like me, they feel you .
Knowledge and trust are two powerful goods on business, and actually worth thinking of and investing in. With this in mind, I will leave you with the idea that open communication, which is cordial and honest, rarely causes you to mislead. If you have a business idea that excites both you and a friend, you deserve both to share the excitement, try it together and use each other like sound card.