Friendship & Business

Just like marriage, the coming together of two people can be bliss or a complete disaster. It starts off with a great idea; Mark and Mike love each other’s company and both are experienced plumbers. What could be better than going into business together?
 
Pro Tip #1: Put Everything in Writing
 
The informality of the relationship may make you feel like just because it is your friend that nothing needs to be in writing, but the opposite could not be truer. Having things in writing keeps the both of you accountable to your agreement and your partnership.
 
Speaking of paper trails…you should also both be aware of what is going into the bank and what is going out. If you cannot reconcile your bank and keep accurate records of your accounts receivable, consider hiring a third unrelated party to keep track of those things for you.
 
Pro Tip #2: Put Your Cards on the Table From the Beginning
 
Conversations are much easier to have when you are in the honeymoon stage of your partnership. Before he crashed the company truck, it may be easier to discuss how an accident may affect each partner’s share in the insurance costs.
 
Other important conversations might be:

1.  When will we pay dividends?
2.  How do we decide who gets paid what?
3. What if we hire someone to help? Where does this person’s salary come from? Who tells this person what to do?
4.  What happens if one of you dies or is unable to work?
5.  How long do you wish to own your business?
6.  What if a buyer shows interest in purchasing your business?  

Pro Tip #3: Hold Each Other Accountable
 
It all boils down to fair and honest communication. If the other party angers you, tell them…in a nice way. There is a tendency to let family and friends’ poor behaviour slide…but it is not a good business move. Pick a time when you are both fresh and clear minded. Remind yourselves why you are in business together, then tackle the hard stuff.