We feel Uncomfortable Doing Business with Friends & Family — Part 4: What Entrepreneurs Wish You Knew But Would Never tell you
Still, in the series of what entrepreneurs wish you knew but will never tell you, we will now look at Part 4.
In case you have not already read the previously discussed issues, they are:
- We Have Time Management Issues — Part 1
- Our Business’s “Well Being” = Our Well-Being — Part 2
- What We are Trying to Do is Harder than We Thought — Part 3
Now, I shall confess something else:
We feel Uncomfortable Doing Business with Friends & Family.
This is a confession no full-time entrepreneur would like to admit. There are family and friends that we are fine working with or for. However, as a general rule, it can be a nerve wrecking thing to work for or with loved ones.
- Sometimes we take liberties with each other: Perhaps it is a case of people not respecting each other or not taking each other seriously enough. Regardless of the underlying factors, it can certainly go both ways. Family and friends may expect special treatment. This could include expedited service, special “non-existent” discounts and leniencies regarding payments. On the other side of the coin, us entrepreneurs can also behave in a problematic manner too. For example, it is not uncommon to find that new customers are treated better in some establishments than customers that have evolved into friends. So, there you are keen on supporting a local business but that local business has stopped giving you the kind of service that they used to during your new customer “honeymoon” stage (if I may call it that). This goes both ways. I do not know where the balance can be found but it is certainly quite tricky.
- The Special Treatment for Family & friends Affects our cash-flow: As finances are the life-blood of any business, a healthy cash-flow is important. When too many clients or customers expect special treatment (discounts or relaxed installments) for services and goods already delivered, the entrepreneurs bottom-line is affected. It is not uncommon to find that people who already consumed a product may struggle to pay. They may have the finances but the fact that they already consumed has robbed them of the initial perceived value of it. Don’t believe me? Ok, ask any entrepreneur that sells edible perishables. Ask them about their experiences when it comes to selling their products on credit. Ask them about the challenges they have faced. The truth of the matter is, most people do not see value in the chicken they already ate 3 weeks ago and have not yet paid for. It is what it is. Now, imagine having to keep on following up this payment week after week. It is exhausting and unpleasant.
- Disputes are far more reaching than normal: When you have a dispute with a family member or friend through a business matter, it may affect everyone more than otherwise. Many friendships have been destroyed because of frayed business relations. After all, how do you laugh and hang out with a friend or family member when you both know that there are unsettled matters between you due to some business matter.
- It May Test Your / Our Trust than never before: Trust is something most of us have with good friends and reliable family. Often times it is the reason why exceptions are made. Unknowingly or knowingly, it can be misused. Interacting because of business may mean stretching this trust to levels that would never have been necessary before. For example, if an entrepreneur is looking for additional finance to inject into their business, lending money from a relative may seem like a good idea. It’s great if it all works out. However, if not well thought out, it could evolve into mistrust, and failed business experiences that taint future family engagements. Imagine borrowing money from your rich uncle Bob to pump into your gaming business and then tragically losing it all. This is the very recipe for the kind of family dinners all of us would like to avoid — forever.
- Insist on a written signed agreement for business dealings with us
- Us entrepreneurs are going to make mistakes. Horrible ones, possibly without sufficient self-awareness. If you can, sit with us one on one and share your constructive thoughts on what better value would be for you: e.g. maybe you see where we can improve our product or service delivery.
- If a good relative or close friend of yours does not want to do business with you but is happy recommending you to others, that’s ok. It could be that they do not want to damage the relationship they have with you. Respect that. It is better than awkward moments that could follow if ignored.
What are your thoughts? Please feel free to leave comments below.
Want to discover more about Maclean Mbepula? Find her on Linkedin or here on Medium. She’s written 3 books (one in entrepreneurship from a grassroots perspective (“Challenge Accepted) and 2 poetry books which are available for purchase on Amazon or you can sign up and get the kindle versions 100% FREE.
Originally published at https://www.linkedin.com.