How to Mix Business and Friendship!

1. Individually write out your vision for the new business.Be sure to go into as much details as possible. Be explicit! Do not rely on your friend "thinking" the same way as you do. Consider things such as how much time each of you will put into the business (on a weekly basis), what in competitors it will have and what will you do to be unique in your market?


2. What responsibilities will each of you have? What roles will each of you have? What hours will you each contribute? What is most important to you? What are your personal and professional goals? What do you hope to achieve and in what time frame? What if it doesn't work? Do not be afraid to discuss the negatives, thoroughly!


3. Clearly define what success & failure in the business means to you? What financial return do you need to survive in the first 12-24 months? Some people might have to exit out of a new business venture, if it cannot cover their day today expenses after 6 months (For cash flow reasons). For others, the size of return on their time and money may be a factor that sees them lose interest in the business. Imagine the horror of discovering your business partner wants to pull the pin on a business that you think is doing well, because their expectations are different from yours and you had not discussed it prior to the venture!


4. And then there is the money bit! What financial capital is required to start the business? Where or who is that coming from? How will profits be distributed? How much will be reinvested back into the business and how much will be taken by the owners as "return" on their investment? What if you run out of money and money cash is need to keep the business afloat? How will shares be diluted or other investors bought in?


5. What about what the expenses? Clearly outline what expenses the business will cover and not? How much can one partner spend without consulting the other? Clearly define a process or protocol to handle disagreements?


6. Then there is the time issue? Who does what and when? What about when one partner puts in many more hours than another? How will you handle this?


7. What is your exist strategy? Is this a business you want to build to sell or pass on? Go into the business with the end in mind! Do not be afraid to discuss the tough topics, like "What if one of us wants to leave the business and the other does not?"


8. Then it's time for Group Share! Once you have dumped your personal manifesto and vision for the new business on paper, come together with two copies each. Then pass the talking stone!! Read each others ideas, share the excitement, clarify points of agreement and disagreement. Once done, I recommend a good meal!! (complete with wine!) Go home and read over your own vision again, then your potential partner's (Yes, that is why the two copies!). Do this daily for a few days and let the ideas percolate! Your first ideas are often good, but great ideas may require effort and thinking!!


9. Then write it all down together! Once you have decided that you do have a shared vision, common goals and time frames, sit down together and write your mission and vision statement together along with a memorandum of understanding, outlining everything you have shared and schemed in the previous days! The more detail the better.


10. Once done, find a good lawyer to help you set up the most appropriate entity (company, trusts, partnerships etc) for your venture.