Friends, Family, Business: A Delicate Balance

Every entrepreneur faces the tempting prospect of going into business with those closest to them—but should they? We tackle this challenging question by examining the double-edged sword of family and friendship business partnerships.

The allure is undeniable: working with people who already understand your character, share your values, and genuinely support your vision. These built-in advantages create a foundation that many successful family businesses have leveraged for generations. As we share the story of a thriving family bakery where clear roles led to long-term success, it's easy to see why the prospect remains so appealing.

Yet beneath this rosy surface lurk serious pitfalls. Work disagreements that spill into Thanksgiving dinner. Difficult conversations about underperformance that never happen because you don't want to hurt feelings. Entitlement issues that create workplace imbalance. Through the cautionary tale of Mike and John's clothing boutique partnership gone wrong, we explore how even longstanding friendships can fracture under business pressure.

The solution isn't necessarily avoiding these partnerships altogether, but approaching them with clear-eyed preparation. Detailed contracts that outline roles, responsibilities, and exit strategies. Regular communication that separates business discussions from personal relationships. Boundaries that allow you to be both family and colleagues without either role undermining the other.

Whether you're contemplating bringing your sibling into your startup or launching a new venture with your best friend, this episode provides the framework to make that decision wisely. Have you experienced the highs and lows of mixing business with personal relationships? Would you like to hear more stories and strategies in a follow-up episode? Share your experiences—the good, the bad, and the complicated—of turning your personal connections into professional partnerships.

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Episode Transcript

Speaker 1 (00:00):
Hello world, welcome back to Not Just Candle Talk.
Today we are diving into theold age debate.
Should you go into businesswith friends and family?
We've all heard success storiesof family businesses thriving
for generations, but we've alsoseen friendships destroyed over

(00:21):
business disagreements.
So let's break down some prosand cons.
I'll give an example of one ofeach one of each situations, so
let's jump right into it.
So some of the pros is it'salready built trust built in

(00:41):
trust and loyalty.
You already know each other'scharacters right, making trust
easier to establish Sharedvisions and passions.
Family and close friends oftensupport your dreams than a
random business person.
Better communication Okay,that's a pro.

(01:02):
You can understand each other'swork style, strengths and
weaknesses, flexibility andunderstanding during tough times
they might be willing to makesacrifices for the business.
Ok, those are a few of the prosof going into business with a
family or friend.
The pros of going into businesswith a family or friend they

(01:25):
know you right, they understandyou, they know you, they see you
and they value you.
Hopefully you've got thosetypes of people around you where
they actually value you andyour vision.
So here's a quick story.
It was a family of mom, dad anda daughter who ran a bakery,

(01:52):
and each person had their role.
So the mom, she did the recipes, the dad, he did the finances,
and the daughter, she did themarketing for the business,
right.
So you know, they did prettywell in the community, small
little bakery in the community.
They did well and each personknew their role.

(02:14):
Each person understood whattheir role was in the business,
executed it.
They had a long, a longfulfilling business in the
community and and things weregood, right, things were good
until they wanted to retire andeventually sell.

(02:35):
So that's, that's a, that's apro when everybody knows their
roles, execute them and go fromthere to see the business thrive
.
A con would be workdisagreements can spill over
into personal relationships.
That's a con.
Those are boundaries that arenot clear.

(02:58):
Entitlement issues.
You know some family membersfor friends, they might feel
like, hey, you know some, somemay expect special treatment,
you know, just because they arethat close to you.
Accountability and performanceit's tough to discipline a loved

(03:19):
one for poor work, right, it'stough.
It's tough when you have todiscipline or maybe even fire a
close friend or family member.
But you got to have those.
You got to make those difficultdecisions when you're dealing
with businesses and I think alot of times when you go, when

(03:41):
you, when you go into businesswith a family or friend, draw up
a contract.
You know, draw up a contract,make sure everybody knows their
role, their expectations anddon't be afraid to implement
every, each and every thing inthat contract.
Make sure everybody is clear onwhat their role is and hold

(04:05):
each other accountable for thatrole Right.
And also, also, it's also goodto have an exit strategy.
Like I said, I just gave anexample of you know the, the
family, and when the parents gotolder they wanted to retire.

(04:30):
So have an business venture.
And you know the middle to theend.
So have an exit strategy.
If things come to light,everybody has different start
building, different dreams andaspirations, different dreams

(04:52):
and aspirations.
Or if you have to buy outsomeone in the business, have
that exit strategy in thecontract, contract, contract
contract.
I'm really big on those andthat goes into my next story.
These two guys they went intobusiness, they had a little
clothing store together, mikeand John.
They had a little clothingstore and the clothing store a
boutique, and the boutique wasgoing good.

(05:13):
You know they, uh, they were.
You know they had a good runand eventually, uh, john, he, um
, he, uh, you know, just gotahead of himself, right, and
start slacking on on his duties,uh, within the boutique, and
Mike had to actually buy him out, and that weighed on their

(05:34):
friendship, of course, but atthe same time it was written, it
was written in the contract, itwas already there.
So it hindered the friendshipbecause there was a little
fluctuation on roles, but itneeded to be done and Mike just
had to buy him out and, um, I'mnot sure if they're still in

(05:56):
business or not, but that thatcan be considered as a con and
also it, as long as it's in thein the, in the contract, is
understood.
When things go south, right.
So keeping business and yourpersonal life separate, set

(06:16):
boundaries with everybody andanybody.
You have to.
You have to say, hey, okay,we're going to.
When we're here, we talk aboutbusiness and I value our
personal relationship, so we'regoing to cut it off once we lock
the doors or once we offline orwhatever you are doing, don't

(06:39):
mix business with your personallife, and maybe you can have a
better relationship that way.
If things go south, like I said,define roles.
Everybody knows their part inthe business.
No one will feel slighted atall Once everybody knows their

(07:03):
roles and expectations.
So if you're consideringworking with a family member or
friend, be honest and haveconversations first.
Right, make sure everyoneunderstands what is expected.
Make sure you know, even if yousay, hey, let's just run it for

(07:24):
X amount of years, you know,put that, have a conversation
about that.
Check in with your person everyso often and see if they are
still on board with or as as ispumped up about the business as
you are.
So have those, thoseconversations and and keep each

(07:47):
other, keep each other in theknow when you have a change of
heart.
I think that's really thatshows the respect level of where
you to that person and whereyou at as you mature in your
business.
Right, have open and honestconversations, because if you
don't, that's when things tendto, you know, go south and

(08:14):
feelings are involved andeverything like that.
I'm really big on communication,you know, let me know, let's
talk about it and let's get to apoint where our conversations
are not difficult, to where wecan't even utter a word.
You know, I think a lot oftimes, communication if it

(08:34):
wasn't for communication, youknow a lot of relationships will
go south anyway, personal orbusiness wise, and you know so,
always keep that contract, keepthat communication, I think,
with those things and respect ofcourse, keep those three things

(08:55):
in in at the front and head ofany situation when you go into
business with your friends andfamily.
And, um, you know that thatmakes for a better environment.
Um, and I actually know acouple of people who actually
ran their business and then lettheir kids join, taught their

(09:18):
kids how to run the business,and the kids are running it now,
like the parents are justsitting back and retired and you
know, situations like that arealways great to hear about and
see, I know I know a few peoplewho have their own business and
have their kids running it ortheir kids get involved in some

(09:40):
type of way.
I think that's awesome.
So I just wanted to do a quick,a quick overview of that because
it's needed, that talk isneeded, because a lot of times
you, you, you, you trying to,you want to look out, you want
to look out for family andfriends, right, and uh,
sometimes we, you know we are,we uh shy away from it, but, um,

(10:05):
you know, if you have thosepeople in your life that your
and their vision are equal.
Why not give it a shot, right?
So if anybody would want to, Ican do a part two of this.
I'm going to wrap this up liketo like for me to do a part two

(10:27):
of this one and or have anystories, um, about this uh topic
.
I am, I'm always open to do apart two, as always, um, and
once again, thank you forlistening and I'll see you next
time.
Thank you, bye.