Want to Start a Business with Friends? Apply These Six Rules

Want to start a business with friends? Apply the below six rules. They will help you avoid the common pitfalls of this type of working arrangment.

Rule #1: Be selective.

We all have a friend who is entertaining, but not necessarily talented or reliable. Never choose this guy (or gal) to partner in business. He will only hamper your business, which will ruin your relationship. Instead, let this friend be a sounding board or cheerleader as you join forces with your more responsible buddies who can help you move ahead.

Rule #2: Set boundaries.

Yes. Business owners all over America will always tell you to set boundaries in the work place, but this part takes guts with friends. You have to sit down with the crew you put together and outline the dos and don'ts of your business. Then, you have to determine consequences. Make sure everything is in writing and that all participants sign a form in agreeance to your decisions.

Rule #3: Delegate roles.

Running a business isn't easy, especially during the first five years. So, chuck the fantasy of you and your friends casually completing tasks with no real boss or role. You need structure to be successful. Start by delegating different aspects of the business to each friend according to skill. This process will ensure that the nuts and bolts of your business will be intact.

Rule #4: Share the risk.

Unfortunately, for many people, unless there is a shared risk, they will not put 100% into building a business. For this reason, you should ask your friends to be equal investors and shareholders in your joint venture. Since they also won't want to lose out on their time and money, they will also fight hard to make your business a success. Even the "potential" slackers will put their best foot forward.

Rule #5: Exact discipline.

As with Rule #2, this one is difficult to do. When a friend that's part of your business gets out of line, you must exact discipline. This means you have to face-off, write-up and/or fire if necessary. You cannot let your personal feelings keep you from make prudent decisions about your business. A true friend will understand and a not-so-good-one might bail on your relationship.

Rule #6: Incorporate fun.

This last rule is the best one. Since you are working with a group of friends in a business, have fun. Incorporate activities into your daily routine that you all enjoy. Celebrate the fact that you truly like your co-workers and take pleasure in their company.

Use these six rules and you will effectively mix business with pleasure.

Also see:
People You Should Partner With In Business
Job Hunters: 6 Reasons to Start Your Own Business
How to Get What You Want When You Call Your Business