Going Into Business with Family and Friends
Zeqr Co-Founder, Daniel Hedlund, shares his thoughts on setting up business with friends or relatives.
Going into business with friends and family is a common course for many entrepreneurs, and for good reason too. You already know one another’s strengths, weaknesses and passions – plus the probability that you came up with the business idea together is high, so you’re both already hugely invested in it.
Not to mention that working with someone you already know well can be loads of fun!. With friends and family, you can skip the whole “getting to know each other” stage and jump head first into the nitty-gritty of the work you have both chosen to do together.
Your relationship also sets the tone for the business. You can work together to create a fantastic company culture, taking previous work experiences (both good and bad) to sculpt your business ethos and direction.
However, that’s not to say friends and family businesses are without disadvantages. Perhaps the most challenging aspect of entering into this type of business is creating and maintaining a level of professionalism.
It’s imperative to ensure that your business model and any legal agreements are created with the mind-set that you are business partners, not friends and family.
If that means assigning one person the position of CEO and the other COO due to each other’s individual strengths then so be it. Any notion of hierarchy needs to be snubbed and instead the best interests of the business need to be at the core of every decision.
Whilst taking direction from a friends and family member may be challenging, sometimes this is necessary to progress and grow the company.
If all goes well the business will develop and additional employees will inevitably be brought in, but what about the phase before that?
No matter how talented and experienced the both of you are, there are still bound to be skills gaps that need to be filled in order for the business to get past the first few month’s hurdles.
Additionally, when you start a new job you are typically given a coach or mentor. Not the case when it’s your own business; you’re on your own. The lack of both these things can lead to high-levels of stress, potential failure and broken relationships.
To fill any skills gaps without committing to the cost of a full-time employee, business owners should seek expert guidance outside their organisation.
Whether it’s speaking to an alternative friend, an old colleague, or using one of the many “gig-economy” platforms to find people with the expertise you need, there are ways to overcome this obstacle without parting with vast amounts of money or importantly, risking relationships.
Similarly, speaking to an external mentor about your business needs can help resolve obstructions to development.
Whilst it may have been difficult to find these people in the past unless you had a huge social network, thankfully that is no longer the case.
All business owners have to do is look online to find someone, perhaps even in a different country to you, who can help navigate and recognise problems as well as be a sounding board for potential business ideas.
So, if you’re about to take the plunge with your friend or family member, go for it. Just remember that you can and should seek external advice in order to become a success.