Wednesday, January 4, 2017
Mixing business with friendship -- or marriage -- can be a troubling combination. Launching a company with someone with whom you share a strong connection has plenty of room for conflict. But, at the same, building a business on a strong personal foundation can be a huge advantage.
A group of entrepreneurs from the Lincoln, Nebraska, area offered advice on how to navigate potential conflicts in order to benefit from personal connections at "Power to the Small," a panel discussion sponsored by Windstream. Here are tips to make sure your venture succeeds while preserving the relationships intertwined within your company's success:
1. Delineate Your Deal Breakers
Stephanie Jarrett founded Bulu Box -- an ecommerce business that offers monthly subscriptions to health, nutrition, and weight loss products -- with her husband Paul. Their first step was to list "deal breakers" that would cause them to pull the plug on the venture; a critical one was to state clearly that they would not put the business ahead of their marriage. "Fortunately, it never came to that," she says. But creating that list allowed them to keep the health of their marriage top of mind even during the stress of growing a small business.
Friends or spouses who start a business should be sure they share a similar outlook on key issues, such as whether they want to grow slowly, take on debt or seek outside investment to speed things up. "Be clear about your expectations, and about the mission and vision of your company," says Jennifer Rosenblatt, who founded MusicSpoke, a marketplace for musicians based on her husband's experiences in the industry. "Clear communication in a husband-wife situation can ensure you're not bringing 20 years of baggage into the business,” she adds.
Spouses and friends should clearly spell out their titles and responsibilities based on personalities and skill sets. This can reduce friction and ensure your roles are complementary rather than redundant. When Chris Davis and a friend co-founded Travefy, a group travel planner, Davis took over the technology side of the business, while his friend assumed primary responsibility for sales. "He's very friendly and nice and exciting, and I'm a software engineer," Davis says. “He's optimistic, and I'm analytic. We fit really well into those separate roles."
4. Put It In Writing
Business partners can ensure they are in lockstep by creating a partnership agreement. A partnership agreement requires the partners to consider all the possibilities that might come down the line, such as if one of the partners want to sell his equity in the firm. There are a number of accessible, standard templates to get you started, from low-cost legal advisories and other sources. If you have a business account with a bank, your banker can point you to samples, as well.
After you've clarified your vision, individual roles, and other essential elements of your business, you may soon find that launching a business with a friend or spouse will be one of the best decisions you've ever made. Researchers find that teams composed of close friends outperform those of acquaintances, and studies also show that businesses benefit from the mutual trust that married couples have, as well as their ability to predict each other's moves. So, even though starting a business will inevitably entail stress—and probably a lot of stress—enjoy the fact you're going on this journey with someone you know well, like spending time with, and maybe even love.