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Friends, Family, Business: A Delicate Balance

Not Just Candle Talk

Every entrepreneur faces the tempting prospect of going into business with those closest to them—but should they? We tackle this challenging question by examining the double-edged sword of family and friendship business partnerships.

The allure is undeniable: working with people who already understand your character, share your values, and genuinely support your vision. These built-in advantages create a foundation that many successful family businesses have leveraged for generations. As we share the story of a thriving family bakery where clear roles led to long-term success, it's easy to see why the prospect remains so appealing.

Yet beneath this rosy surface lurk serious pitfalls. Work disagreements that spill into Thanksgiving dinner. Difficult conversations about underperformance that never happen because you don't want to hurt feelings. Entitlement issues that create workplace imbalance. Through the cautionary tale of Mike and John's clothing boutique partnership gone wrong, we explore how even longstanding friendships can fracture under business pressure.

The solution isn't necessarily avoiding these partnerships altogether, but approaching them with clear-eyed preparation. Detailed contracts that outline roles, responsibilities, and exit strategies. Regular communication that separates business discussions from personal relationships. Boundaries that allow you to be both family and colleagues without either role undermining the other.

Whether you're contemplating bringing your sibling into your startup or launching a new venture with your best friend, this episode provides the framework to make that decision wisely. Have you experienced the highs and lows of mixing business with personal relationships? Would you like to hear more stories and strategies in a follow-up episode? Share your experiences—the good, the bad, and the complicated—of turning your personal connections into professional partnerships.

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Speaker 1:

Hello world, welcome back to Not Just Candle Talk. Today we are diving into the old age debate. Should you go into business with friends and family? We've all heard success stories of family businesses thriving for generations, but we've also seen friendships destroyed over business disagreements. So let's break down some pros and cons. I'll give an example of one of each one of each situations, so let's jump right into it. So some of the pros is it's already built trust built in trust and loyalty. You already know each other's characters right, making trust easier to establish Shared visions and passions. Family and close friends often support your dreams than a random business person. Better communication Okay, that's a pro. You can understand each other's work style, strengths and weaknesses, flexibility and understanding during tough times they might be willing to make sacrifices for the business. Ok, those are a few of the pros of going into business with a family or friend. The pros of going into business with a family or friend they know you right, they understand you, they know you, they see you and they value you. Hopefully you've got those types of people around you where they actually value you and your vision.

Speaker 1:

So here's a quick story. It was a family of mom, dad and a daughter who ran a bakery, and each person had their role. So the mom, she did the recipes, the dad, he did the finances, and the daughter, she did the marketing for the business, right. So you know, they did pretty well in the community, small little bakery in the community. They did well and each person knew their role. Each person understood what their role was in the business, executed it. They had a long, a long fulfilling business in the community and and things were good, right, things were good until they wanted to retire and eventually sell. So that's, that's a, that's a pro when everybody knows their roles, execute them and go from there to see the business thrive.

Speaker 1:

A con would be work disagreements can spill over into personal relationships. That's a con. Those are boundaries that are not clear. Entitlement issues. You know some family members for friends, they might feel like, hey, you know some, some may expect special treatment, you know, just because they are that close to you. Accountability and performance it's tough to discipline a loved one for poor work, right, it's tough. It's tough when you have to discipline or maybe even fire a close friend or family member. But you got to have those. You got to make those difficult decisions when you're dealing with businesses and I think a lot of times when you go, when you, when you go into business with a family or friend, draw up a contract.

Speaker 1:

You know, draw up a contract, make sure everybody knows their role, their expectations and don't be afraid to implement every, each and every thing in that contract. Make sure everybody is clear on what their role is and hold each other accountable for that role Right. And also, also, it's also good to have an exit strategy. Like I said, I just gave an example of you know the, the family, and when the parents got older they wanted to retire. So have an business venture. And you know the middle to the end. So have an exit strategy. If things come to light, everybody has different start building, different dreams and aspirations, different dreams and aspirations. Or if you have to buy out someone in the business, have that exit strategy in the contract, contract, contract contract. I'm really big on those and that goes into my next story.

Speaker 1:

These two guys they went into business, they had a little clothing store together, mike and John. They had a little clothing store and the clothing store a boutique, and the boutique was going good. You know they, uh, they were. You know they had a good run and eventually, uh, john, he, um, he, uh, you know, just got ahead of himself, right, and start slacking on on his duties, uh, within the boutique, and Mike had to actually buy him out, and that weighed on their friendship, of course, but at the same time it was written, it was written in the contract, it was already there. So it hindered the friendship because there was a little fluctuation on roles, but it needed to be done and Mike just had to buy him out and, um, I'm not sure if they're still in business or not, but that that can be considered as a con and also it, as long as it's in the in the, in the contract, is understood.

Speaker 1:

When things go south, right. So keeping business and your personal life separate, set boundaries with everybody and anybody. You have to. You have to say, hey, okay, we're going to. When we're here, we talk about business and I value our personal relationship, so we're going to cut it off once we lock the doors or once we offline or whatever you are doing, don't mix business with your personal life, and maybe you can have a better relationship that way.

Speaker 1:

If things go south, like I said, define roles. Everybody knows their part in the business. No one will feel slighted at all Once everybody knows their roles and expectations. So if you're considering working with a family member or friend, be honest and have conversations first. Right, make sure everyone understands what is expected. Make sure you know, even if you say, hey, let's just run it for X amount of years, you know, put that, have a conversation about that. Check in with your person every so often and see if they are still on board with or as as is pumped up about the business as you are. So have those, those conversations and and keep each other, keep each other in the know when you have a change of heart. I think that's really that shows the respect level of where you to that person and where you at as you mature in your business. Right, have open and honest conversations, because if you don't, that's when things tend to, you know, go south and feelings are involved and everything like that.

Speaker 1:

I'm really big on communication, you know, let me know, let's talk about it and let's get to a point where our conversations are not difficult, to where we can't even utter a word. You know, I think a lot of times, communication if it wasn't for communication, you know a lot of relationships will go south anyway, personal or business wise, and you know so, always keep that contract, keep that communication, I think, with those things and respect of course, keep those three things in in at the front and head of any situation when you go into business with your friends and family. And, um, you know that that makes for a better environment. Um, and I actually know a couple of people who actually ran their business and then let their kids join, taught their kids how to run the business, and the kids are running it now, like the parents are just sitting back and retired and you know, situations like that are always great to hear about and see, I know I know a few people who have their own business and have their kids running it or their kids get involved in some type of way. I think that's awesome.

Speaker 1:

So I just wanted to do a quick, a quick overview of that because it's needed, that talk is needed, because a lot of times you, you, you, you trying to, you want to look out, you want to look out for family and friends, right, and uh, sometimes we, you know we are, we uh shy away from it, but, um, you know, if you have those people in your life that your and their vision are equal. Why not give it a shot, right? So if anybody would want to, I can do a part two of this. I'm going to wrap this up like to like for me to do a part two of this one and or have any stories, um, about this uh topic. I am, I'm always open to do a part two, as always, um, and once again, thank you for listening and I'll see you next time. Thank you, bye.