The good, the bad and the ugly: Going into business with friends and family
4 min read
08 May 2017
Going into business with friends and family is a popular route for many entrepreneurs and for good reason. You already know each other's strengths, weaknesses and passions, plus the likelihood is that you came up with the business idea together so you are both hugely invested in it.
Not to mention that working with someone you already know well can be plenty of fun! With friends and family, you can skip the “getting to know each other” period and dive head first into the nitty-gritty of the work you have both chosen to do.
Your relationship also sets the tone for the business. You can work together to create a great company culture, take learnings from past work experiences (both good and bad) to mould your business ethos and direction.
However, that’s not to say friends and family businesses are without disadvantages, and perhaps the most difficult aspect of entering into this type of business is creating and maintaining a level of professionalism.
It’s important to ensure that your business model and any legal agreements are created with the mindset that you are business partners, not friends and family.
If that means assigning one person the position of CEO and the other COO due to each other’s individual strengths, so be it. Any notion of hierarchy needs to be disregarded and instead the best interests of the business need to be at the core of every decision.
Whilst taking direction from a friends and family member may be difficult, sometimes this is necessary to progress and grow the company.
If all goes well the company will grow and extra employees will inevitably be hired, but what about the period before that?
No matter how talented and experienced you both are, there are bound to be skills gaps that need to be filled in order for the business to get past the first few month’s hurdles.
Additionally, when you start a new job you are typically given a coach or mentor. Not the case when it’s your own business; you’re on your own. The lack of both these things can lead to high-levels of stress, potential failure and broken relationships.[rb_inline_related]
To fill any skills gaps without committing to the cost of a full-time employee, business owners should seek expert advice outside their organisation.
Whether it’s speaking to another friend, an old colleague, or using one of the many “gig-economy” platforms to find people with the expertise you need, there are ways to overcome this barrier without parting with huge amounts of money or, importantly, risking relationships.
Similarly, speaking to an external mentor about your business needs can help resolve barriers to growth.
Whilst it may have been difficult to find these people in the past unless you had a huge social network, that is no longer the case.
All business owners needs to do is look online to find someone, perhaps even in a different country, who can help navigate and identify problems as well as be a sounding board for potential business ideas.
So, if you’re about to take the plunge with your friend or family member, go for it, but remember that you can and should seek external advice to success.
Daniel Hedlund is co-founder and CEO of Zeqr, a global knowledge hub set to change how people across the world exchange information