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How To Do Business With Friends
By Pegi Burick
Think about your best friend...loyal...supportive... Sometimes. But even the strongest friendships can falter when buddies
talk business.
Doing business with friends is attractive on the surface. A sense of comfort and
trust already exists, eliminating the normal need for each party to prove
herself. But sometimes that comfort causes complacency. Assumptions are made,
boundaries are blurry, and fond memories of the senior prom prevent both parties
from making rational, forward-thinking decisions.
As a financial advisor, I have seen experienced, intelligent women make
uncharacteristically poor business decisions based on a romantic desire to
partner with a pal. I was hired by an accountant who, to increase referrals and
income, decided, unwisely, to keep expectations and boundaries casual when
working with friends. One friend turned out to be purely fair weather, refusing
to pay her bill based on events dredged up from their past. While this friend
should never have brought personal issues to a business setting, my client
recognized that she too bore responsibility for the misunderstanding. She
admitted her mistakes, provided an itemized bill, and learned that doing
business with friends can be disastrous if it’s not done right.
How to avoid the “friend” trap:
- Explain your invoice. Submit weekly time sheets to your client with descriptions
of goals, results, and the appropriate hourly fees.
- Set boundaries ahead of time. Document your billing and payment policies and
make sure your client agrees to them.
- Be clear. Explain the scope of your work, describing what tasks you will not
accomplish as meticulously as those you will. If clients are confused, clear up
the miscommunication immediately.
- Never assume clients understand. If a client does not take notes or ask
questions there will likely be confusion down the road. Plan ahead and send her
frequent progress reports.
- Trust your instincts...If you want to be taken seriously, adhere to standard rules of business.
- Play to your strengths. Stay away from tasks you’re unfamiliar with unless you
have shared with your friend that you’re just learning.
One of the benefits of running a business is being able to choose your clients.
If you do decide to work with friends be sure to implement these suggestions.
Not only will you reach your business goals, you’ll still enjoy girl’s or boy's night
out.