Starting a business with a member of your family or a good friend may sound like a great idea in theory, but opposing ideas and differences of opinion can still cause problems. Can your relationship sustain such conflict?
- Can We Resolve Our Conflicts Peacefully?
What is your track record with this person in the past? Answer this question as truthfully as you can. Going into business with a friend or family member will require plenty of compromise because no two people are going to have the same exact ideas of how to proceed as an entrepreneur. You will find this to be true even if the other person is a close friend or a beloved relative. You need to be able to work constructively with this person and not allow your business discussions wind up in verbal conflict and hurt feelings.
- Can You Control Any Negative Behavior Patterns?
I’m sure you realize that a relative or close friend can literally bring out the worst in your behavior and vice versa. People naturally tend to lower their guard within their closest relationships and express anger and frustration much more freely. If you enter into a business relationship with such a person you will need to find a way to make necessary business decisions that aren’t influenced by your personal feelings for your family member or friend. For example, if your relative wants to develop a product or service that your research has shown to be doomed for failure, can you discuss your findings in a calm, rational manner?
- Do We Have the Same Business Goals?
Business goals are very important to entrepreneurs, especially when it comes to partners. Business partners must strive to be as clear as possible when it comes to mutual planning and decisions. How do you and your partner plan to run your business? What strategies do you plan to adopt? You and your partner should have the same goals, or at least compatible ones.
- Can We Define Our Separate Roles?
When starting out in a family-based entrepreneurship, especially when a big family is involved, it’s very important to have each person’s role clearly defined from the beginning. When personal roles within the business have been decided beforehand, each family member will know exactly what is expected of them. This not only eliminates a lot of confusion, it encourages teamwork and success of the business. It can also improve work performance by allowing each person to work in the area that best fits their own unique talents.
- Should We Be Equal Partners?
One partner may invest considerably more money in the venture, or another will have the knowledge and expertise that makes the business possible in the first place. Should you divide the ownership equally? How will the profits be divided? These are typical questions that should be answered while the business is still in its planning phase. Not only is it important to answer and clearly define such decisions in a written agreement, but you should plan for future changes as well. For example, if a partner contributes the majority of startup costs, it should be decided in the beginning if the invested money should be gradually repaid from profits or should a major share of the business be given to that partner instead.