>> Why not take a look at some of Anita’s other exclusive columns for FMWF or visit our Ask An Expert section for a host of useful advice and information from leaders in their fields.
Or if you’ve already taken the plunge and you’re having difficulties, read our Conflict section from some more xpert advice on how to resolve your problems.
Anita Brook is founder of Accounts Assist a growing firm of Chartered Accountants. She’s been advising small business, sole traders and consultants for 12 years.
Part of working for yourself is choosing who you work with and if that person’s your mate then so much the better, right?
Well, maybe, but if this goes wrong it could irreversibly damage your relationship, so before you enter into a business partnership you must consider whether it is worth the risk.
It may feel unnecessarily formal, but in order to safeguard your friendship (and your stake in the arrangement) it is really important that you do things properly and think very carefully before you take the plunge.
Can you really work with them?
However much you enjoy someone’s company, spending most of your working life with them – dealing with stressful and serious situations – is a bit different to meeting up at the weekend for a nice day out. With all this ‘work’ time spent together you could end up compromising the social life you previously had together – after spending 9 to 5 in each other’s pockets, a Saturday night out might seem less appealing.
It is highly unlikely that you will get through your career without some form of conflict – even if you and your friend have previously never had a cross-word. In order protect your relationship you must be honest and open with each other, take criticism on-board and deal with disagreements in the office without taking them personally.
Who’s in charge?
You want everything to be equal and there’s no reason why it shouldn’t be, but with no one in charge how can problems resolve themselves? It is a good idea to assign responsibility for different parts of the business – it’s likely that each of you will have varied strengths and weaknesses that will hopefully complement each other. Obviously big decisions will have to be made together, but it is important that you trust each other’s judgement, particularly in areas where one has more experience than the other.
Times change
You may be without children, have loads of free time on your hands and be in good health, but things will change in your personal life and, as your business hopefully grows, your work life will too. Issues that could arise because of this include; debates over working hours, work/life balance and one partner being less committed than another. As the business develops, your ideas about how it should expand may also differ. It is really important that you prepare for these eventualities. However much you trust and value your friend it is better for both of you to have some systems in place to safeguard against changes in circumstances.
Call in the solicitors
Regardless of the structure of the business e.g. partnership or limited company, it is essential to sit down before you start and set in writing a partnership or shareholder agreement. The document should clearly set out how the business relationship will operate; the rights and responsibilities of each party, what would happen in case of a dispute, how the relationship can be terminated and who’s invested what.
A good solicitor will be able to draft this for you – it is definitely money worth spending, and will help smooth over any awkward situations if things come to an end – important for your business and your relationship. Hopefully, it can sit in the filing cabinet never to be referred to but you will be glad it is there if things do go array.
If you can make it work, setting up business with your best mate could be an amazing, life-changing move that will bring you both wealth and happiness. Get it wrong and you may end up sacrificing a friendship and losing out financially, so think very carefully before becoming business buddies.
>> For small business tweets follow our new @smallbizzone twitter feed
Tags: Business Advice, Business and friendship, Conflict, Starting a Business
No Comments on this post