If your dream of starting your own business has become a true possibility, you’re probably tossing around the idea of a business partner (or two). While the first people that come to mind are probably your family or friends, it’s important to think twice before diving into such a responsibility with close connections. Here are some things our digital marketing experts suggest considering before making a decision:
One thing to consider is the trust you have in your friend or family family member. While trust is an important aspect of any relationship, it’s also a risk. If you put all of your trust in your business partner and he/she takes advantage of it, you could be left in a bad situation. Trust usually leads to promises and guarantees that aren’t in writing, which can cause serious problems.
Starting a business takes a lot of focus, dedication, and hard work. Partnering with close connections can also put emotion at the forefront of your business, which can alter the goals to be achieved and you may lose sight of what really matters. Both you and your partner will have to put your feelings aside to really get your business going.
Two friends or family members who are just opening up a business may be excited about taking on responsibilities like finances, marketing, clients, human resources, etc., but trying to split everything evenly may make it difficult to truly succeed. If you and your partner both have strengths in the same fields, it could lead to one of you doing more work than the other (and spark a bitterness that hurts the business).
If you do decide to open up a business with a friend or family member, keep these things in mind:
- Are you both in it for the same reasons and have the same goals? Differing options can lead to decisions that may not be for the best.
- Get everything in writing. Even if you know they’re good for their word, draw up a short agreement and have your partner sign it. That way, if things go sour, you’ll both have some assurance.
- Consider what might happen if one or both of you wants out of the business. Emotional ties can make it hard to leave and money or responsibilities may be at risk if one decides to go.
- Will you offer your partner an equity stake? This is a big decision and should be thought about carefully. If you’re uncomfortable saying “yes” right away, you could always give them a share over time.
- If needed, will you be able to fire your friend or family member? Being able to look at the situation from an outside perspective is something that’s necessary in order to make decisions that are right for your business.