Mixing Business with Friendship

The old adage talks about not mixing business with pleasure; But how about mixing business with friendship ? Recently, I’ve started discussing a potential business idea with a very close friend of mine, someone I know from childhood. Now this is not something that is likely to take off immediately, so we have all the time we need to talk about it, explore things etc, and we are finding that part itself a whole lot of fun. When my friend brought up the idea, instinctively, I said Yes ! Probably because of the closeness we’ve shared over the years, which has included some catfights and other ups-and-downs, I have this comfort level with taking on a new role with her as a business partner. In general though, I don’t think one can automatically guarantee that working with a friend will go well, either on the business or on the friendship count.

Starting a new business comes with its own share of risks and uncertainties. The friendship has to be close enough to weather that. For example, if the business doesn’t work out, there cannot be a situation where one blames another for it. One of the basics has to be that both partners clearly bring some value into the work. No one can be a partner, simply because he or she is your friend.. Going this way, I think, would be a sure-fire recipe for failure. Not only will one person fail to pull their weight, later, when things go wrong, it leaves a large space for the recrimination game. Both partners ofcourse don’t need to be actual experts on the subject – one could be a technical expert, the other a finance whiz ! One could be the ideator, the other an implementor…or maybe both are jack of all trades ! Infact, if you look at some Indian businesses, where third-generation members were inducted solely because of their family ties, its clear that they didn’t have either the passion or skills for the business. So at a first level, calling in someone because they are friend or family, may provide a deceptive comfort that fails when things go tough.

Another important thing would be the level of honest communication possible between the partners. Sounds basic, but isn’t. Money often makes many simple things difficult. But – if its not a friendship where you can discuss these things with ease, then maintaining both the business and the friendship would be tough. So issues like who brings in the money, how do we divide it, who brings in new clients, who is responsible for legal issues, should be discussed in detail. Its not necessarily, that both partners always be compensated equally. Maybe one person puts in more money or time. Perhaps, as the business achieves a critical mass, one person wants to move onto other things and be a sleeping partner. Personally, while I know a lot of people who have good ideas, I wouldn’t consider a partnership with all of them. This friend, when she buzzed me, I had no hesitation in saying yes, because I knew I could be upfront about all of this. (I am not going to be talking about the idea itself right now, since its still getting finalized and I don’t want to let the cat out of the bag, but gradually, you should see more references on this blog:)

These are some of the things that I can think of for myself. What other caveats do you have for mixing business with friendship ?

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10 Comments

  1. jMixing business with friendship is fineif-
    1.you both compliment each other.like if one is agressive the other should be toned down.
    2.there should be NO I insist No interference from ‘well wishers’ from both sides.I have known a case when three friends entered into partnership and the uncle of one of them was an auditor.He started questioning at every step and wanted to see immediate effect.The person in qn. wanted to continue but was forced to withdraw.The other two are doing fine.

  2. Oi oi! You beat me to it, girl!!

  3. Padma-ji, thats another important point indeed. Also, in the case of people who come from salaried backgrounds, perhaps this interference tends to be higher, as people are always sceptical about business !

    DG, what can I say ๐Ÿ™‚

  4. Firstly, great to see you back in action on this blog, Apu, although I must confess I do enjoy your fiction avatar a lot more. That’s not to say I’m not glad you resumed blogging at all.

    Friendship and business. My take is that there are certainly positives and negatives, and success of the partnership depends on the extent that the advantages overweigh the disadvantages or vice versa. Some of the positives are greater levels of trust and honesty, potential for harmony, understanding each other’s strengths and weakness – mainly soft and intangible. The negatives could be hard – like disproportionate allotment of effort or reward or both, discomfort in managing money matters professionally, diverging expectations and ambitions especially after a period of convergence or agreement.

  5. I think you are thinking pretty level headed about the entire situation. Be excited, but expect major downers which need to be worked through. Think of it as a relationship, ha – it’ll need a lot of work and nurturing to keep things running smoothly.

  6. Jeez u nut – u’ve gone and done this. Check out the advice u’re getting.

  7. Sri, good to see you here. Yes, fiction blogging is more “creative” in some ways, but it tends to be pressurising in a way. Also, perhaps, because I tend to be far more demanding of my fiction work ?

    Hanna, maybe weird to say this after writing an article like this, but I don’t expect major downers in my case, simply because the communication lines are open to begin with ๐Ÿ™‚ (DG, hows that ?)

  8. Good save, girl!

  9. one of the things which would sometimes create issues is when either of the partners wants to bring in some of their ‘own’ people in the business. like a brother, sister, friend etc. which can become difficult to handle at the later stages when the business grows.

  10. I know this is an old thread but hopefully someone will see my post. I was friends with this younger couple. They are young enough to be my kids & the guy works in the heating/cooling business. He had lost some jobs due to the owners mismanaging the business and some backstabbing that went on when he worked with a guy who helped train him for that line of work. They went to the same church & now are not really friends and he’s had several jobs since that time. Last spring, this young guy was working for another company that he was not entirely happy with. He wanted to go out on his own & start his own business which seemed like the logical thing to do since he’d had some bad luck with sticking w/any one company for very long. I asked him about putting in a new furnace for me. He said he would do this & I paid him money upfront to buy the unit and he’d install it on his own time when he wasn’t working for his employer and would do it in a weekend. Right about the same time, the guy & his wife buy a house and he also quits his job with the heating/cooling company. He seems to have a lot of irons in the fire at this point and my furnace sat in my garage for most of the summer before he ever got rid of my old furnace & took the new one out of the crate. Another month goes by and the new furnace is still sitting there but is not hooked up and does not have the piping in place needed for it to be fully installed. I had company coming at the end of Sept. and he had said he’d have this installed long before then. He was there a few days before they were to arrive & still did not have it running. He was to come back on Fri. & didn’t show up & didn’t call. The company came & I had heaters on by Sat. I called him on Mon. & asked him what the deal was & he said he’d be there today. Long & short of it is that he got it installed when the temps were around 33 degrees & I was long past having much patience for him to complete the job. He did not charge me as much for labor as I would have had to pay with a regular company but it seemed clear that I was not a priority & that he did not really want to do the job. I would have preferred him simply tell me if he didn’t want to do it rather than let it drag out for 6 months. We are still friends but if I had it to do over, I would have paid more to use someone who could have done it within a reasonable time frame. Needless to say, I can’t recommend him to others now.


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