How To Do Business With Friends
Think about your best friend. She’s loyal, she’s supportive, and you can borrow her shoes. 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. Just because she’s your BFF doesn’t mean you can do business together. Women often ignore their intuition for fear of seeming petty. 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 night out.
Written by Pegi Burick, Founder of The Financial Whisperer
