Starting a business is exciting and what’s even more exciting about starting a business is the prospects of making money whilst doing something you love, being your own boss and delivering a product or service that many clients will appreciate.
When starting a business there are several crucial steps that need to be taken to ensure that a business functions effectively such as business plan, type of business (Sole Proprietary, Partnership, Close Corporation, Private Company and Public Company), administration, registration and so forth.
Once all of the abovementioned has been decided, a very important step follows which is the selection of the business partners as these people will serve as the foundation of the business and they will carry forward the goals and mission of the business and will ensure the stability and smooth functioning of the business. In most cases, entrepreneurs often choose to go into business with someone they can trust and who has proven or is aiming to prove their worth in the business and as such we choose our closest friends or family.
Well this is what this article is presenting, the pros and cons of doing business with friends and family:
Pros:
•Sometimes two or three heads are better than one, meaning that your friends may offer you a different perspective in terms of how to approach the business and it’s market
•You already know the capability of your friend so which means you already know which area of expertise they are more likely to deliver successfully their tasks.
•Communication is easily developed between partners because you already understand each other and how each partner approaches their tasks in the business.
•Trust is also easily developed. Because you already know each other it’s easier to delegate work and some tasks to your partners because you already know their strengths.
Cons:
•Partners (Friends) make take each other for granted. Depending on the type of friendship that exists some business partners m
•Some partners may not have the business interests at heart. Your friends may join the business because you recruited them or rather you took out a loan with them and in return you offered them a share of the business
•It’s never easy to criticize your own friends work especially if you know they have put all of their efforts into the project.
•It’s never easy distinguishing or rather drawing the line between friends and business partners. Some partners (friends) may not know where to draw the line in terms of friends and business partners.
Many businesses that were started by friends have succeeded to become some of the businesses in the country. It’s always best to weight the good against the bad and see if going into business with friends is the best way to ensure that the business progresses forward. If the pros weight more than the cons then it should be easy to enter into a business venture with a friend or family member but however if the cons weight against the pros then it’s best to just start the business on own and maybe consider friends and family members at a later stage when they show an interest in the business.
By Nhlanhla Molepo
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