Would you be more content with your life if had a loyal family and wonderful friends, but did not have much in the financial column or were your net worth making an enormous amount of money but you were a distance from your most close relatives and colleagues, or had no true companionship?
For many , the affection of their family members cannot be rivaled by the richest of individuals The old saying is, “Good friends are better than pocket money.” While your wealth may be destroyed, your family members and genuine friends will be loyal to you throughout good times and tough times.
Although a strong relationship with your friends and family will be invaluable, you shouldn’t think that the bonds you have with your close friends will carry over into business. In reality, running an organization with family and friends can be difficult and full of challenges.
Does your relationship stand up to the test of time?
It’s not uncommon to hear of loved family members being torn apart when they entered into joint ventures and of friends that can no anymore communicate following a failed attempt at joint venture. What could running a business alongside your beloved family members cause this kind of personal anxiety?
The truth is that running a successful business requires determination and professionalism The demands could be in conflict with the romantic feelings you share with your loved ones and family. Let’s examine some tips that will help you manage the challenges of conducting business with those whom you cherish.
Find out if you are compatible
Before beginning the process of developing a business plan with your loved one, it is essential to be transparent about the capabilities and traits of everyone who are involved. Consider the habits of your own that may hinder your business and then consider how they could cause problems in the near future.
For instance, if one person is always putting off tasks every day this could impact your ability to keep track on tasks or projects. It’s inappropriate to gift the business cheque book to a person who’s reckless when it comes to money. Avoid being in business with those who do not meet the standards you set for yourself.
Establish specific roles
You must be professional in what each person is required to perform in managing the company. Don’t assume how you will be able to fulfill your obligations and roles. it is advised to write down your work duties in writing to ensure that there won’t be confusion in the future.
Even though you’ll all bring useful skills to the business however, there should be one person who is the ultimate authority. It could be extremely difficult for employees when multiple partners have conflicting demands and you must establish an organisational chart that clarifies each individual’s levels of authority.
Discussion on the possibility of profit sharing.
One of the benefits of starting a the industry with your family and friends is the possibility of working together to make money, so it’s crucial to develop plans for how profits from the business should be divided. It is also important to determine which owners will receive an income per month and wait till the company has a profit.
There is a possibility of resentment when one person does more of the work but receives the same amount of money as the other partners So, make sure that each job is properly paid. Additionally, make sure that you are in agreement on the amount of cash should be kept to help grow the company in the future.
Make use of independent advisors
While you might think that family and friends must respect each other, if you’re running a business it’s best to have an accountant to manage the books and ensure the financial transactions are in line with the rules. Also, consider hiring an attorney to draft legally-sound and fair agreements for everyone involved.
If there are disagreements over how your company should be run It is advisable to seek out a business adviser who can assist you to decide on the best approach. If you are in a tight budget it is best to find a seasoned person who can assist all the stakeholders in making the best decisions.
Make an exit strategy
If you’re hoping that your business ventures are successful however, there might occur a point when you have to end your relationship with your family members. Make sure there’s an established procedure before you start which will determine how assets and liabilities are to be divided.
If there are obligations that need to be paid and if there are outstanding obligations to be met, it could be difficult to shut down the company and pay each party. Consult an accountant to figure out the best method to liquidate the business and make sure that each person is paid fairly.
If running a business together with friends and family members doesn’t be a success, you should remember that you had close relationships with your family and friends prior to starting your business. Keep your focus on your relationship and not problems at work and revive the camaraderie and fun that you experienced prior to.