Thursday, December 3, 2009

Should You Do Business With Friends? - WomenEntrepreneur.com

Should you . . . or should you not . . . do business with friends? The short and obvious answer is: It depends. Whatever side of the deal you're on--giver or receiver--here are some ground rules to consider:

1. Only do business with people you trust. If you have an important marketing program to launch, are you entrusting the copywriting to your former roommate Rita because you think she's a dynamite writer who really understands your business? Or because she gave you a sob story at the last high school reunion about how hard up she is for cash and would r-e-a-l-l-y be grateful if you could throw her a bone, seeing how fabulously well you're doing in business and all?

If you don't have confidence in Rita's ability to get the job done (much as you may love her personally), don't hire her. It's a recipe for disaster. The flip side: Don't necessarily shy away from business with a friend simply because she's a friend. One of my best friends from high school is a brilliant orthopedic surgeon who operated on my husband's knee; in turn, she's delighted to have me handle her legal work. Having mutual respect as professionals and friends is crucial.

2. Treat the deal like any other business that crosses your desk. If you're going to get involved in a long, drawn-out project, this is not the time to be handling your friends' freebies. You're not doing a friend a favor if you don't charge her for (or you deeply discount) the products or services you provide only to end up in an unprofitable situation you later resent. Friends understand that friends need to pay the rent, their employees and the cell phone bills. Be clear about what you'll charge--or what you can expect to pay if you're on the receiving end. Friends really appreciate your checking with them to make sure the compensation they quoted you is a fair deal for them.

3. Get it in writing. It seems counterintuitive, doesn't it, that you have to be more careful with friends than with strangers? Still, any time you mix business and friendship, there are even more opportunities for misunderstanding precisely because you think you know each other well.

Delia had this very issue with Eileen, a friend from an entrepreneurial mothers' networking group. Eileen was excited about her new product launch and asked Delia for help with PR services, albeit on a shoestring. Wanting to support another mother in business, Delia agreed to make a few calls. But Eileen kept expanding the scope of what she wanted Delia to do, and she got angry when Delia couldn't or wouldn't make the time for her based on the paltry amount Eileen was paying. Had Delia had a written agreement, she could have contained the scope of her services and better managed Eileen's expectations. Instead, Delia and Eileen were frustrated with each other, which caused a huge amount of tension at their mutual networking group.

4. Check in regularly. This is not a license to be a pest, mind you. But you want to treat any possible communication hiccups pronto. Get crystal-clear clarity (try saying that 10 times fast) about deadlines, what materials are needed to complete your order and how you'll check in with each other to make sure there aren't any lingering questions about what needs to be done.

Also, be mindful of mixing business with pleasure. If you're out with your pal for Gals' Night Out, check with your friend first before peppering her with all sorts of business questions. Like you, she's had a long, hard day and may need a break. She may prefer your making an appointment to talk to her during normal business hours so she can have your file in front of her, access your materials and have her "business head" on.

Doing business with friends successfully is not impossible, provided you can put business first when you need to. But that's a difficult boundary to set. Sometimes, the best way to do business with friends and keep the friendship intact is not to do business with them at all.

Should You Do Business With Friends? - WomenEntrepreneur.com