Making a family member or a friend a business partner may seem like a good idea at first glance, and it can even be a motivating factor for entrepreneurship and motivation. However, personal relationships can complicate business management. Often, entering a business is easy, but exiting is difficult.
Therefore, it is necessary to think carefully before any business partnership, and especially to make a comprehensive assessment for friendships or family relationships. Before making a partnership offer, one should consider the following 10 issues:
Are we aligned with the same goals? Different individuals may have different expectations for growing and selling the business, passing it on to the next generation, maximizing profit, etc. Therefore, alignment in the main purpose is crucial.
What will a new person bring to the business? The dimensions of the relationship affect the partner's qualifications and job requirements, posing a risk. Clear definition of job descriptions and expectations, as well as determining what is expected from individuals in advance, is necessary.
Should there be any share offering? It is important to clarify from the beginning what percentage of benefits will be provided to the incoming partner and how this will be adjusted based on certain criteria.
What will happen in case of disagreement? Personal relationships make solving professional problems difficult and complicate dispute resolution. Determining what to do objectively in case of disagreements will reassure the parties.
How well do their risk-taking abilities overlap? Different personalities may have different behaviors, as well as different risk-taking abilities. It would be beneficial to agree on decision-making in important matters related to risk-taking.
What will be the roles of the parties? In partnerships among family members or friends, the non-conflicting powers and responsibilities of individuals involved in operational management should be clearly defined and applied.
How will professional and personal lives be separated? Keeping personal matters separate from business matters and having all parties adopt this approach is an inevitable management necessity. Rules, such as not discussing business during family meals, should be established from the beginning.
How will the incoming person be evaluated? Family members or friends tend to sweep many things under the rug. However, accountability and transparent evaluation are essential for management performance. Having an understanding and even obtaining third-party services for evaluating the way and criteria is useful.
What will be done if the partnership does not work out? A partnership change is a more challenging issue than a career change. Factors such as the impact on relationships and gaining different dimensions can put partners in difficult situations. However, thinking about what will happen if someone leaves the business, how continuity will be ensured should be considered as a significant aspect from the beginning.
How will the transition plan to the new generation be? Even though many issues seem to be overcome when a long-term and harmonious partnership is maintained, the issue of transferring the business to the new generation brings the whole process back to square one. Therefore, planning for the transfer to the new generation should be done in advance.
Once agreement is reached on these fundamental 10 items and there is clarity in the answers to the questions, steps can be taken towards a business partnership. While carrying out the partnership, some principles need to be implemented in practice to avoid problems in the fundamental issues mentioned at the beginning.
Things to consider when managing family or friend partnerships:
a. Defining tasks and powers according to the strong aspects of family members or friends: Task and authority definitions should be made and implemented according to the strengths/qualities of individuals. Giving sales responsibility to a person without sales skills will create problems both in terms of productivity and increase the risk of conflicts that may arise from the discrepancies in the initial 10 items.
b. Keeping personal matters separate from business: Adapting this principle in practice will prevent mixing personal issues with business issues by crossing professional lines.
c. Being understanding of generational differences: This factor, which naturally comes up as a process, should be used not negatively but positively in terms of bringing benefits. Conflicts between conservative first-generation and innovative second-generation are a common issue. However, making decisions by obtaining an objective evaluation from both sides and deciding is a reassuring and efficiency-increasing factor in practice.
d. Separation of private and professional time: Business should be conducted in a way that is much different from how the family is run. In terms of business safety, social life during events such as meals, entertainment, and weekends should be scheduled separately from professional life.
All of these may be perceived as easily overcome at first glance and met with comments such as "we trust each other" or "we get along well." However, experience has shown that when delving into the details of business and encountering many sub-dimensions in practice, processes that create contradictions and dilemmas for individuals can be created. From this perspective, thinking about and being transparent with the relevant parties about the issues mentioned above will ensure the establishment and management of healthier business partnerships, regardless of the level of trust and professionalism.
Dr. Bilinç Dolmacı
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