It is common for friends to partner to begin a business venture. However, as much as it is rewarding, it also comes with a few hiccups. There is always a thin line between friendship and business. While many people can manage it, some people end up losing the friendship and the entire business.
That is why it is important to begin a business with the right person. You would want someone who also has the same drive and not doing business with a friend trying to play catch-up. The passion for building a successful business must be inherent in both parties for this arrangement to work out. Here are some of the things you should know when setting up an LLC with your friends.
- Set Boundaries
If you want to kick off on the right foot, you need to sit down with your friends to discuss roles and responsibilities. This way, you will all be on the same page in terms of handling the new business. This shouldn’t be hard, as friends sit down together all the time, talking about comfortable subjects. While you discuss your business roles, each person can choose one area where they would function. This will also be based on their strengths and weaknesses. The problem with failing to identify roles is that problems will arise later on when a particular area of the business is neglected.
- Have Frank Decisions At The Early Stage
One thing you shouldn’t neglect when starting a new business with friends is learning to manage conflict. Friends argue and fight all the time, but it can happen even more when a business is involved. You should not be afraid to confront or touch on sensitive subjects. There will be times when you need to discuss uncomfortable issues like salaries, job descriptions, titles, and other business-related matters. You should not be afraid to point out weaknesses and address them immediately. If you are afraid to be frank with your friends, it can negatively affect the business.
- Sometimes You Have To Take Charge
One of the things people need to know is that any mistake in business is detrimental to its success. Starting a business with friends is an important decision, and when you eventually take this step, it isn’t the time to start business coaching. Some decisions have to be made and work that needs to be done. It is not in every case that there will be time to set up a meeting or discuss some fair agreement. If you have to make an emergency decision, you will need to step up to the task quickly. If you have to put every business decision-making at a meeting, it would only slow down the progress of the business.
- Every Opinion Matters
There is a reason why an LLC is not a one-person business. Even though you are the type to take charge of running the affairs of the business, now and then, you have to listen to the opinion of others. There are some things you may not see or problems you cannot fix, and your friends may have a better perspective of things. You should give room for everyone to table their ideas and eventually find a quick resolution to the matter.
It can be very rewarding to manage a business with friends because of the trust that’s already there. However, there will be times when your relationship will hit a rocky road because of the business. It is important that you manage the two relationships. Also, ensure that when it is time to close the business, it ends on a peaceful note.