Getting into a Business with a friend, or for that matter with any person(s) you are related with, is always a delicate matter. Recently, a relationship that I treasured, blew up. And that got me to write this post.

Without going into much details, I recently had a fallout with a friend over a business deal. I got thinking about all my relations/friends I have lost due to money and business in general. And the list is long. So obviously I wanted to know that if I was wrong in the decisions I have had to make and this made me open-up about these experiences with people who have stuck by me. And it seems I am on the right track.

This post is about what I have learnt about getting into a Business with a person you are related or friends with.

  1. Firstly, right off the bat, I did like to start with this awesome concept of compartmentalisation. If you are in a Business with your friend. Separate the two. Make it two types of relationships with the same person. Don’t mix the two. It’s hard but totally doable. Keep your friendship/relationship separate and your business relationship with the person separate. And make this known to him/her/them. This will save you a lot of heart ache and trouble much later on.
  2. In any and all relationships, including friendships and business relationships, we tend to take the other person for granted. It’s normal and it’s bound to happen. But being mindful about it helps a ton. It is also a way of making sure you don’t cross boundaries. Sure you get a few fly-by’s with the person and it feels great that you can count on the friend when in need. What you have to respect is his/her boundaries. If he/she can cross over the divide from friend to business parter and vice versa and help you out, don’t take that for granted much. Respect that.
  3. Never talk business with a friend/relation by texting him/her. Texting leads to misunderstanding the tone of the conversation and the general context of the to-and-fro can be easily misunderstood, leading to both parties having to clear up a mess which could be altogether avoided in the first place. Instead extent them the courtesy of a phone call or a meeting, which is dedicated to your’s/their’s business concerns and stay off from friend talk. Write down the business concerns/issues/problems, during these meets, in a notebook, just like meeting minutes. Email a copy of this to all parties involved in the Business, yourself too.
  4. Make sure to note down the extent of financial involvement within the business, by all parties. Again write it down and mail it to everyone involved in the Business. This makes sure no one is lacking and gives you the right of bringing your concerns/issues up in the next business meet. If for some reason the other party is asking for help, respect and acknowledge that, whether you help them out or not. If you can’t help, then make it clear to them that you can’t. You don’t owe them an explanation as to why, but you sure owe them a yes or no call.
  5. If you are unsure about the other party or are having doubts about the involvement of the other party in the Business. Draw up a contract, make it official. This will make the business relationship more serious in its nature. In fact all business relationships, regardless of the other party being a friend/relation, should have a written contract drawn up. It keeps the business relationships crisp.
  6. Don’t destroy the friendship/relationship. Be an adult and accept that your business relationship didn’t work out and move on. Don’t criticise the other person(s) or break off your friendship/personal relationship with them (Okay this is not valid if the other person has wronged you in a manner from which you can’t recover, like for .e.g. stolen money from out of the business — happened to me once). Don’t go subtweeting about them or act like an ex-girlfriend scorned, unfollowing them on social networks, etc. Don’t avenge what you have lost. That’s just childish and that kind of behaviour will only stunt your growth as a responsible person. At the end of the day it’s business and treat it like so.
  7. Always enter into the Business with your friends/relations with a pinch of salt. Ready yourself for the business relationship failing. Work’s wonders. You should have a backup plan for each and every business, regardless if you are getting into it by yourself or with anyone else. Make your exit points clear to yourself and them.
  8. If you happen to agree to disagree with your friend/relations, while making crucial business decisions. Put a hold on those decisions. If it’s business critical then take a temporary decision so that your business doesn’t suffer in the interim and get help in the form of reaching out to business coaches, other friends and family members. Again, don’t burn the relationship just because both parties couldn’t reach a mutual ground. That is again a childish response. And will show your aptitude and will reflect back on you, as person to do business with and as a friend/relation and a person in general. And after getting help from whomever, if you are still not satisfied, get a second opinion. This only goes to show that you value your friendships as much as your business relationships. And, again if the final decision is not based on your liking because it’s not possible to continue the business relationship without going through with that decision, change yourself and your stance. Try to change how the decision affects you individually, as a person. And if that fails too, its time to end the business relationship and continue on with the friendship/personal relationship with the person.
  9. If the business relationship has ended because of concerns that couldn’t be addressed by both. Don’t punish the friendship/personal relationship. Instead make up for the lost time. Life is short and most people you meet and make friends with are beautiful and unique.
  10. Respect each other’s personal boundaries. Again, just because you have a two sided relationship with the other person(s) that doesn’t mean you can overstep his/her/their personal and professional boundaries. For e.g. If your business partner is investing Amount X in the business and at the same time saving Amount Y, don’t hold that against him/her/them. What he/she/they do with Amount Y is none of your concern and doesn’t concern your business. If they are willing add Y to X, great, if not, you and the business have no claim or right to Amount Y.
  11. Make clear and precise what you and everyone involved brings to the Business. Write down the duties of all parties involved and email everyone involved a copy.
  12. Stick to the decided plan and stick to agreed upon decisions made by you and them. Any Business involves money, either it coming in or going out. Sticking to an agreed upon plan helps both parties. Each side has their own way of managing their personal finance. Respect that. No matter what. If you need help planning your personal finances, switch to friend mode or hire someone and ask for help. More often than not the other person(s) would be more than happy to help you out, and this is one of the biggest pros of doing business with a friend/relation. But, don’t take this and their help for granted too often. Sticking to decisions made by both parties helps maintain a balance between the two types of relationships you have with the same person. If something has changed discuss it, again not over text (see pt 3). At the same time, don’t hold the other party responsible, if they did like to stick with the initial decisions made by BOTH, you and them. And this is as good as a contract. A contract once written can only be changed by one party if there’s a clause you agreed to or when both parties agree to the amendments. (Source:
  13. Don’t go bitching about what your friend did or didn’t do, w.r.t the Business, with other friends/people. Remember, the two are separate. And are meant to be separate. Never mix concerns/issues that arise in the personal relationship with concerns/issues in the business relationship. It’s hard but again will save you a lot of trouble and misery later.
  14. Any Business’s goal, at the end of the day, is to earn money. In the case where this is not clear to the other party or the other party is “in it for the ride”. Make it clear to them that it’s a Business. And if that doesn’t stick too well with them or they take it lightly. End the business relationship. Again make a note of what you did expect from the Business and the business relationship.
  15. Business’s fail all the time, again take this into consideration. Don’t hold it against the other party, if it failed. If it failed because the other party did something utterly and irrevocably wrong, then yes you are entitled to your resentments, etc. But do move on. You are not going to get anything by fawning over the spilt milk.
  16. Last but not the least, remember you don’t have to do anything you don’t want to do w.r.t to the business relationship, just because he/she/they are your friends. If they can’t respect that, it’s not worth getting into a Business with he/she/them.

These are my personal point of views with respect to the topic. I would love to know how you handle business with friends/relations. Any and all suggestions are welcome. Photo credit: Salford Business School