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December 16, 2014

5 THINGS TO CONSIDER BEFORE GOING INTO BUSINESS WITH A FRIEND


Starting a business with a friend sounds so exciting, and it
definitely can be, but you need to be sure it’s going to be the right fit
before you commit to anything. It’s so easy to get swept up in the idea of
starting a new venture together that you can overlook the personality traits that
may cause clashes during stressful times. I can’t tell you how many crafters
and business owners I’ve met along the way that formed partnerships with their
friends, only to have it end badly. I’ve worked with a few friends on
businesses and have been lucky enough to have good experiences, partly due to being compatible in the 5 areas below:


1)
Work ethic

Are you guys on the same
page when it comes to getting things done? If one person is a workaholic and
the other is a little more laid back, it could eventually cause tension. You
may end up balancing each other out; however try to think ahead to a stressful
and busy time like preparing for a craft show. How do you picture yourself
handling the situation when you’ve just had a long day at your full time job
and you have stock to prepare? Now consider how your partner will handle it. Do
you see yourselves on the same page or will your responsibilities in the
business leave you with the bulk of the work while they get to relax the night before a big show? There will always be a bit of imbalance when it comes
to workload, especially if you have different skills; the important part is
making sure that it’s addressed beforehand so no one feels resentful.


2)
Lifestyle

You’ll also want to consider
how your lifestyles may work together or clash. Are you both married with
families? If you’re on the same page in that area, you’ll be a little more
understanding when the kid’s soccer practice causes you to cancel tonight’s
meeting. You should also take a look at each other’s work schedules and
personal sleep preferences. Meeting up to collaborate could be challenging if
you work full time during the day while they have a night job that keeps them
busy in the evenings. Are Saturday mornings your best times to meet? They may prefer to sleep in and work late into the night. Make sure your schedules will have some overlap so you’re not always missing each other.


3)
Finances

How are you going to cover
business expenses? What about your expectations for getting paid? Do you both
believe you should be putting profits back into the business or getting a
salary? Take the time to chat about how much your business is going to cost to
start and to run and how that may interfere with your personal finances if
you’re not taking out a loan. If one partner has their spouse to support them
while the other is buying their first home on their own, you may be relying
heavily on one partner’s chequebook. Money is never fun to talk about but it’s
important to set some expectations up front as to how bills will be split and
put it down on paper.


4)
Visions

Talk about your goals, not only
for the business but in your personal lives as well. You want to be sure you’re
on the same page business wise; you may be working your butt off to turn your
small startup into an empire while your partner is looking at it as a fun side
project they don’t expect to expand beyond you two. Be sure you’re not taking
completely different paths in your personal lives either; if it’s your
partner’s dream to travel the world in the next 2 years, you want to be aware
of that.


5)
Strengths

Here’s one area where it is
beneficial to be opposites. Jot down what you each think your strengths and
weaknesses are and who will be responsible for what in the business. Hopefully your partner is covering areas you’re not as strong in and visa
versa. If you’re both introverts who hate selling and talking about the
business, you may have a few disagreements when it comes time to decide who’s
doing the interview with the local TV station.

Pin It!

If you’ve gone over the areas above and think you’ll make
great business partners then it’s time to dot the i’s and cross the t’s. Put
together a partnership agreement and go over possible scenarios for the future
if one partner no longer wants to move forward with the business while the
other does. In business, you should put everything on paper, regardless of how
strong your friendship is.


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