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Hiring Your Friends or Family?
January 18, 2007
You’ve been talking about starting that clothing store with your best friend for years. Or perhaps you and your sister are finally ready to open that home store you dreamed of endlessly when you were still roommates at your folk’s house.
Now that you're in the start-up phase, the real issues of running a business with a close friend or family member are upon you. How will you stay friends? How will you separate your work life from your home life? How do you avoid a depressing failure that will haunt your Thanksgiving dinner table for years to come?
One definitive piece of advice for start-ups…with your friends and family: Communicate. Get everything out upfront, draft contracts and have discussions where you dissect every possible business scenario.
Putting away all fairy-tale notions about the “ideal” family or friend business is step two. Don’t let it get to the point where you have to fire your own sister. Remember, even when the business doesn’t exist, that animosity will still remain, causing years of strife.
Although there's no foolproof way to avoid such an ugly experience, here are a few tips for increasing your odds of success:
Create Specialties. People involved in business with their friends or families need to do what they’re especially good at. They need to know what there job is and isn’t. Define job titles to prevent future drama.
Lay Down the Law. Hiring your friends can definitely be a double-edged sword. On the one hand, you can work with people you know you like and you don't have to face the overwhelming task of recruiting and hiring strangers. On the other hand, will you still like them if they flake off work? Moreover, will they like you if you have to lay down the law? Just like a partnership between friends or family, it's best to enter into this relationship with all the rules established first.
Write a business plan. Every business needs a business plan, no matter how modest. Once you detail your vision, show it to a consultant for an objective outside opinion. There is a tremendous value in feedback from an unbiased source.
The Bottom Line: If you plan carefully enough, a family or friend, business can be rewarding as well as profitable.
Posted by Shanu Singh Guliani on January 18, 2007 | Comments (0)
