Mixing friends and business

Catching up on old questions/posts. One good one had to do with how to handle friends who become clients to make sure friendship stays solid and yet have the client relationship remain businesslike. This issue applies with business partners (e.g. one of my business partners is a long-time friend; another is a cousin), vendors, etc.

For me, the issue is clear:

Be explicit about when you are being a friend/family member and when you are being a business partner/client/vendor. Avoid mixing the two by being explicit:

“I’m your friend, but right now I’m talking to you as your web designer….”

There is a great saying I read on a bus in Kenya, posted by the bus driver (in a country where family ties and friendships run deep):

You are my friend, yes.
You are my cousin, yes.
But in my business, I do not know you.

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  • Eric

    Invaluable advice Andrew. This is something that must be remembered when incorporating a business. Many people make the mistake of bringing their friends on board by offering them 5 or 10% of the shares, purely because of their friendship – not because of any business reason (such as an investor). Friends really have no place in your organization unless what they offer is going to increase its value. On a personal note, I’ve been reading this blog for about a half year now and would just like to say that all of the advice I’ve received from you through this blog has been invaluable. Thanks for the time you put into this blog on a weekly basis, and I hope to read many more blogs/articles from you in the time to come.

  • http://www.bittime.com transio

    I’ve had only bad experiences working with friends:

    I became involved with a female business partner of mine in the past. The business relationship destroyed our romantic relationship, after which hard feelings infected and killed the business.

    Having taken a couple of family and friends’ projects (after constant nagging to help), I can also say that you should never do this unless you REALLY need the money. Meetings are long and drawn out, calls for advice or comments are frequent and unnecessary, and the whole process is frustrating.

    I will never take a job again from a personal contact unless I solicit it from them (i.e. it’s in my best interest). These days, if they come to me, I send them to one of the many other people I know in the industry who can use the work.

    That’s just my personal experience… I’m sure others’ have varied.

  • http://www.waterfallweb.net/ RockyShark

    On the other side of the coin, my wife and I have been in business for almost 8 years (and married for 13) and it’s never really been a problem for us. I guess it helps that we both have the same philosophy with regards to business so we never really have many disagreements in that department.

    As for doing work for family/friends – I haven’t done it, but I expect it could be troublesome. Probably they would try to squeeze evey last thing out of you as transio said.

  • http://norbert.mocsnik.hu/ norbert_m

    It was my post, thanks for replying Andrew. What I mentioned is that my clients/partners seem to get more and more closer to me and these relationships started to turn into a friendship–they even told this to me when talking on the phone. This should make me happy because it (hopefully) proves that I’m doing things right. On the other hand, I’m scared a bit; most people having businesses with friends face many problems. Although in my case the friendship isn’t the “basis”, I’m afraid we’ll have problems in the future. Does any of you experienced something like this in the past? Would you avoid this situation?

  • http://www.aveco-service.be wvanelderen

    As a rule of thumb a can safely say never work for a friend or family. I understand your problem but try to keep business and friendship separated.

  • Scott M. Stolz

    Norbert, part of it depends on what came first, and also what is expected by both parties.

    If they were clients/partners first and then became friends, then you would probably not have any problems. They already understand that you have a business and that your relationship is professional when doing business. They understand that they must pay you and not get special favors. If their whole angle is to get special favors, then I’m not sure if they really could be classified as a friend.

    On the other hand, if they were friends first and then later became friends/partners, you could either have someone who supports you and respects you as a businessperson, or you could have someone who thinks that they deserve special treatment because they are your friend. Friends who think they should get special treatment or get constant freebies can be the problem, especially if they never return the favor. Scratching each other’s back can be a good thing where appropriate, but a leech is not so good.

    So go ahead and be friends with your customers. You will get a lot of repeat business that way and you may find you have someone who is there when you need them.

    And the leeches? Well, don’t let them suck you dry.

    Also, it may be worth your while to actually look and see if your so-called-friends are really friends. You don’t necesarily have to get rid of them, but it would be good to know who is really there for you and who is out for themselves.

  • sidakwa

    friendship and bizness need to be kept separate , i leanrt the hardway that in bizness u have to make a lot of logical decisions which do not do friends a lot of good , since most friendships are based on lot of emotional based decisions

  • http://www.gauss.info realestate

    Unless one of friends has personality problem, this would be an advantage rather than disadvantage. Good friends know that they won’t be cheated, and they can come together anytime and discuss business. They should clearly define eachother’s roles to avoid disagreements: One of them makes the final decision , while the other only make suggestions etc.

  • http://www.hurtdidit.com hurtdidit

    As with RockyShark, my wife and I have been in business together, going on six years now. Not to say there haven’t been occassional hurdles to overcome, but easily by and large our arrangement works for a few key reasons:

    1) We are both utterly loyal to each other, and as such we trust each other (essential in any partnership)
    2) We met each other before starting the business, so knew each other well enough to know our strengths and weaknesses, and our mutual willingness to compromise when needed.
    3) We both REALLY want to make the business a success (as RockyShark said, a common philosophy).

    Having said all that, most couples would never be able to work together, nor should they. If you have any doubts, then don’t take that plunge, as it will only end in misery and bad feelings.

  • atl

    I have tried the friendship and business thing several times. From friends before business relationship… to making a friend through working together… and in my opinion none work! I am so flustered with these people right now… I dont understand why people can’t keep their egos to themselves why we are try to handle business…. I think that I start out too nice and when things become a problem (i.e. people being late or totally disregarding professionalism) then I totally back off… I only back off after having to have a “talk” with the people about a million times… I do not think that it should be hard to remember professionalism in business even if you are friends. To me a friend would try to work with you instead letting their egos and their problem with taking directions from a “friend” become the problem. Why can’t we work together like we dont know each other… and become friends again later?

  • jorcsa

    I work in a management position for a public agency where adherence to ethics codes are of the highest importance to stay on the high ground, but even more important, employed. A lifelong friend who owns a business related to my department’s duty assignments called to say he was opening a new division in his company that would be a “perfect fit” for me to do business with him. I explained that we had never paid anyone for the service he offered because we had no need for it. Secondly, I explained that it would be a conflict of interest for me to contract with him since we were friends, and thirdly I told him the service he was offering was included in my own job description and it would be wrong to pay someone else (especially a friend) for something I already get paid to do, and am expected to do. I thought he understood my position and would respect it.

    A few weeks later he left a barrage of “urgent” voice mails stating he needed to talk with me immediately. I had been out of town but after getting back to my office, I retrieved the messages and called him. He made some rapid small talk then launched into a real intense sales pitch for his service. I again ran through the same reasons as before as to why I could not engage in business with him. Then came the bomb, “OK I understand. What’s your boss’s name and phone number then?”

    I was shocked, and then infuriated he would try to one-up a friend. He made some more small talk, and ended the call. I immediately told my boss of the predicament and she said she agreed we had no need for my friend’s service. Ultimately, he never did call her, but it changed my perception of what I considered a sacrosanct friendship. Now I think of him as a user, and am basically repulsed by his glib talk, to the point I have started dodging his phone calls and rebuffing his social invitations. Although I miss his friendship, I feel that I cannot risk my livelihood for someone who had so little regard for my career.

    Have I overreacted by my willingness to turn my back on a close friend for the sake of ethics and my conscience? Am I being a stodgy ol’ bureaucrat? This issue is really eating me alive. Your thoughts please. Thank you.

  • Maverick

    I agree,

    Although I don’t have a business at the moment, a university module I am studying requires my team to produce a business plan. We have had 8 weeks to do it, and not once has the team been able to meetup with a full turnout, nor do they live up to their promise of delivering something, nor do we communicate or work properly.

    Its frustrating, and you can’t complain because they are your FRIENDS.

    Its taught me the importance of working with the right minded people!

    Argh!!