How do you do business with friends? I’m tired of watching people crash and burn because they shy away from tough conversations.
Well, let me tell you, in my over a decade of starting and growing businesses, I’ve seen firsthand that not everyone who flashes a smile has your back.
Should you not do business with your buddies? I’m not saying you shouldn’t; in fact, when there’s an opportunity for partnership, I reach out to my friends first.
It’s all about approaching it with the right mindset and strategies. There are tested tips and tricks that make it work.
Holding folks accountable from the get-go will sift out the well-intentioned from the shady characters.
Listen, I still get a little misty-eyed when I think about my poor friend breaking down in tears. Can you believe it? A grown man in tears! You go know say water don pass garri.
Business is Business y’all; you can’t afford to play around.
I’ve put together all my experiences, mistakes, and hard-won lessons into a book to guide you through the do’s and don’ts of doing business with your buddies.
I will be generous and share a few points that will guide you. You will get a comprehensive guide to doing business with friends here.
How To Do Business With Friends
If you are starting a business with a friend, keep your heads up and consider all I will share with you.
Define And Maintain Your Roles
Taking a more collaborative approach to doing things may seem natural when starting, but that is wrong. Instead, define your roles early and maintain them.
Take steps to understand your strength and weakness; this will help you define everyone’s responsibilities. I used stories to illustrate this point in the book.
Have The Difficult Conversations Early
You cannot be afraid to have frank discussions on touchy subjects. There can only be one CEO, CFO, COO, head of product, etc. Knowing the team’s strengths and weaknesses will help you assign these roles.
Also, frank discussions on salary, job description and equity should not be put off to a later date. The more you put it off, the more difficult it becomes to have the conversation.
Do Not Democratise Your Business
Our African culture teaches us how to share with siblings and that it is alright to make compromises with friends. We believe, and our TV confirms, that democracy is the fairest form of government.
I am sorry to disappoint you – If you want to survive in business, you have to be a “benevolent dictator”. If every decision you make has to pass through a committee, you will be bogged down in bureaucracy, and your small company will not accomplish anything.
Ask ‘disloyal’ questions on purpose. First, it will help you understand their business value system well. Serious business partners will respect your ‘serious’ due diligence work and will do the same.
Explore Other Options And Leave Your Options Open
Of course, your friend may not like it, but blind love/friendship should not prevent you from seeking alternative strategic partnerships. You have not done your search well if you do not have alternatives.
There will always be the sentiment that you are obligated to work with someone because that someone is your friend. That’s not true. Do not let anyone emotionally blackmail you.
Go Beyond Trust And Protect Your Company
Trust is not enough in a business relationship. A legal contract and agreement are what you need to set structure, good management practices, and relationship rules.
We shared all the agreements you need when starting a partnership in The Ultimate Legal Guide To Doing Business. Get it now.
Some situations may make commitments difficult; that is why you need to protect yourself in case of such an occurrence. There should be a clear division of rights and duties.
Communication is the life wire of any relationship. Therefore, the importance of communication should be amplified when working with friends.
There will always be the need to hold back as friends and not be confrontational. It may work for a while, but it is a recipe for disaster in the long term. I also illustrated this with real-life stories in the book.
Vest Your Ownership/Equity
If you start a company and split equity 50/50 with a friend, what if one of the friends decides to now get a full-time job somewhere else, work part-time somewhere else, or, let’s say, their interest changes? What then happens?
It means they will still own 50 per cent of the company even if they are not contributing equally to its growth. The story of Mr C in the book will make you think twice.
Goals Should Be Aligned
If your motivations and goals do not align, don’t work together; just continue your friendship.
I can’t say more about this because the book did justice to it.
This is some serious insider knowledge on how to do business with your buddies like a pro. Trust me; you don’t want to miss out on this! You don’t want any nasty surprises.
How To Do Business With Friends is a book everyone who wants to do business with family and friends should get. Get it now.
The bottom line is this: Do Business Right! And that’s precisely what our products and services are designed to help you do.
Doing business with your friend can deepen the relationship if you do it correctly. Starting a business with your friend is absolutely possible with everything we have covered here and in the book.
Are you dreaming of starting your own business and leaving a legacy for future generations? At Entrepreneurs.ng, we are your partner in business development from start to finish. Our team of experts will work with you to structure, train, and guide you in running a thriving business that can withstand the test of time.
Our support for entrepreneurs goes beyond words. We offer various ways to help you build a successful business, including joining our thriving community of like-minded individuals or booking a one-on-one business consultation with our experienced experts. You can learn the different ways we can work with you here.
At Entrepreneurs.ng, we don’t just help you start a business; we help you build a legacy that will stand the test of time. Let us partner with you to achieve your business dreams and create a lasting impact. Join our community today and register for The Business Clinic.