Thinking of starting a business with a friend or family member? Here is what you need to do first

Let's face it, we've all either been there or heard the horror stories. Don't get me wrong, I'm aware that there are some great success stories out there, but in my opinion the horror stories outweigh the good ones.

I am talking about going into business with a friend or family member. It can be very easy for you to make the decision to invest all your savings in such kind of a business venture, because why not?

This is a person you love and care about, so there is no way things could ever go wrong, right? 

And even if they do, you will be able to resolve it honourably and respectfully. But just in case things do get messy, here are a few things you need to do first before embarking on a business journey with a close associate.

According to Billy Osborn, General Manager of the Nakuru Box Innovation Centre, working with friends or family in business has enormous potential. However, he stresses the importance of planning and communication to safeguard both the personal relationship and the business venture.

Set boundaries between your business and personal relationships.

Clear boundaries and open communication are key. It is important to fully outline agreements and expectations to avoid any potential misunderstandings as the business gathers momentum. Do not assume that a personal relationship will seamlessly translate into business success. 

Maintain professionalism at all times.

Even with strong interpersonal relationships, maintaining a thriving business requires a commitment to professionalism and the ability to separate personal differences from business matters. Professionalism is central to the success of such partnerships because it advocates an approach to excellence without favouritism, where each party recognises and capitalises on its strengths and weaknesses. This strategic understanding enables informed decision making, particularly in recruitment, and strengthens the company's prospects for growth.

Outline clear roles for everyone.

Establishing clear roles and responsibilities between partners helps prevent conflict and facilitates its resolution, should it arise. This structured framework not only mitigates risk, but also fosters an environment conducive to collaboration and innovation.

Create a plan for the business.

It's possible to have a successful business with your friend, but it's important to have business structures in place to avoid the business collapsing after a few years. By adhering to these principles, individuals can cultivate lasting partnerships that will stand the test of time and ensure the continued success of their ventures.