Running a business with family and friends can be very challenging but incredibly rewarding as well. I've run my own business with family and friends for 14 years, and it's been quite a ride.
I highly recommend getting good tax advice for the setup of your business and tracking expense categories. So you can confirm with and use local tax laws to your advantage.
I've also used a book called “The Partnership Book: How to Write a Partnership Agreement” by Denis Clifford to guide us in writing up the terms of our business relationship.
Every step you take that advances a part of your business.
Table of Contents
3 Tips to Keep Running Smooth Business with Family and Friends
Communicate Effectively
Abraham Lincoln said, “I don't like that man.” “I must get to know him better.” You would think that in a business with family and friends this kind of quote wouldn't apply. My suggestion, think again. As a business leader with family and friends, it's easy to assume that your business communications will be as easily received and understood as your communications in an informal setting. However, different contexts, different pressures, and approaches to business issues can cause our vocabulary, tone, and communication style to change.
It could just be that your family and friends might need to get to know you better, as Lincoln suggested. Here are some common communication approaches in business settings.
Let's see if you recognize yourself in these descriptions. The first is the Detailed Communicator. If you're a Detailed Communicator you typically convey the full sets of views or opinions as well as the step-by-step expectations for what you want from others. Typically, your family and friends will fully understand what you expect.
Manage Conflict
It's not uncommon that TV dramas revolve around family dynamics. In fact, some programs focus solely on conflict amongst the family and often on business. The show Dallas comes to mind with the domineering and scheming JR Ewing.
In fact, the family drama in that show got so intense, part of the plot centred around who might have killed JR. Hopefully, you won't have a family drama that is that spectacular. However being part of a family and running a business can easily create drama, often around a conflict of ideas and expectations.
I'll share some ideas to help you manage conflict with your family and friends and thus maintain productivity and hopefully peace at home too. First and foremost, remember that only communication resolves the conflict.
Now, you can have one on one conversations or schedule discussions with your involved friends and family together, but properly structuring your discussion to address the conflict is paramount for you to succeed.
Begin with the objective of identifying the actual conflict ensuring everyone knows exactly what.
Celebrate Together
The former head of Chrysler, Lee Iacocca, is quoted as saying “No matter what you've done for yourself or for humanity. “if you can't look back on having given love and attention “to your own family, “what have you really accomplished?” This love and attention should not be limited to your home life.
If you're running a business with family and friends, you need to focus on the appreciation you give them in your business as well. The best ways to do that are to sincerely say thank you personally, to person and to celebrate even small wins together as a team.
My primary recommendation is that you should look for reasons to celebrate rather than focus on the things that aren't quite right, and put off that celebratory event. Even more, than in a regular business, businesses run by family and friends involve an investment of heart and soul, and that should be recognized regularly.
Here are my suggestions for celebrating work with your family and friends. First, celebrate early and often.
I suggest you do the same thing. It served us as both an education and helped us think through potential situations we might not have considered.
Also, you may want to check out the book entitled, “Keep the Family Baggage Out of the Family Business” by Quentin J. Fleming. You'll get other perspectives from there as well. I wish you the best as you consider or continue to run a business with family and friends.
