As stated by the survey of Small business Association, there were as many as 1.8 million small businesses in the US in 2011, which fell under ‘Partnerships’. No matter how these partnerships are created, whether they are formed amongst family or friends, they can put up a lot of tension in the relationship while starting business with friends.
Creating firm protocols before starting up a business can lead the business on the right path. Following are three basic tips for a new business start-up with friends or family members and also keep intact a healthy relation with them:
Set Frequency and Manner of Communication
Communication is very important to more business partners; hence setting up the frequency and manner in which the communication will take place is the fulcrum of working with close business partners. It is possible that both the partners share the same passion towards the business, but that does not mean that they will have the same viewpoint towards each decision that has to be made. Conversing on hard-to-make decisions and stopping on mutually agreeable terms will make the business as well as the relation strong. On the contrary, if there is any sort of vagueness, the cracks in the relationships will break out, which can result in a pitfall. Properly scheduled, transparent and open communication is the key to a successful business partnership.
Specifically, Define Roles and Responsibilities, Allow Cross-training
The delegation of roles and responsibilities at the earlier stage is important but it’s not enough for a long-term. The business will grow and change as time passes, so will the roles and responsibilities of each partner. Initially, the first partner has a task ‘A’ and the second partner has task ‘B’; but with the course of time new tasks arrive, then what should be done? A proper and constant communication is important to keep the roles properly delegated.
Circling of responsibilities at regular intervals has added the advantage of highlighting the prominent areas of cross training. Businesses, which run on the islets of responsibilities, are more prone to suffer from minute setbacks like short-term sickness of one of the partners than those who have several resources to finish the task.
Make the relationships priority
Each partner of the business should have an understanding that the decision made, is good for the business, even if it irritates one out of the two partners. Egos will be hurt many times, but there should be a mutual understanding between the two partners to gently keep the ego aside, in order to make the business grow especially going into business with friends.
Respecting each other is important and this feeling of respect towards each other only will make them wise and take wise business decisions. Ultimately the business profitability has to take over the egos of the partners, in order to prosper.
Running a business in partnership is challenging but it can be more rewarding, both personally and professionally. While one would get much more freedom than in a sole proprietorship, it will depend on the relationship with your friend.