Should You Be In Business With Friends and Relatives?

business-partners-family-friendsIf you own a business or are thinking of starting one, you may have considered taking on a friend or relative as a partner in the enterprise. Friends and family may be closer to you than a stranger would be, and should also be more trustworthy, but do they make good business partners?

Assessing Your New Partner

If a friend or relative has approached you with a proposal to go into partnership, you should take some time to really assess the person – from a business point of view.

We all have a soft spot for friends and relatives, and this can sometimes cloud or judgement when we have to take a long, hard look at them as future business partners. A good partner should be trustworthy, dedicated to the hard work that is involved in running a business, and qualified to do the job.

Many entrepreneurs ignore this last requirement when it comes to friends and relatives, hoping that their new partners will “learn the business” through practical experience. However, some knowledge of commerce or work experience is always a benefit.

Making Sure Your Visions Are Aligned

When two business partners have different visions for a business, arguments are sure to follow. At the outset, you should have an in-depth discussion with your future partner where you outline exactly what type of business you both would like to own, how large it should be allowed to grow, and how much capital you both are prepared to inject into it – it’s also not unreasonable to ask your partner whether he or she has ready access to this capital or not.

By discussing your visions for the business, you’ll get an idea of how closely aligned your business ideas are. If you feel that your future partner wants something totally different for the business than you do, it may not be a good idea to enter into a partnership unless you’re in the mood for frequent arguments.

Dealing with Disagreements

Even the best business partners have disagreements from time to time, and before you go into partnership with a friend or relative you should be sure that you’ll be able to resolve your differences in a constructive way.

Think back and try to remember your personal history with this person – have you ever argued or disagreed over something important, and what was the outcome? Was the person reasonable and prepared to listen to your concerns, or did the disagreement result in a fight? If you are not 100% certain that you can disagree with your new partner without emotions getting in the way, you may not make the best of partners over the long run.

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