We have all heard stories of relatives not talking to each other for years or long-term friendships dissolving all because of some financial or business arrangement gone sour. As a psychologist I have been asked to consult with many families and friends where financial engagements have threatened the relationship or have created such turmoil and stress within the family that friends and families are engaged in litigation. The risks of engaging in business relationships with relatives and friends are many. The downside risk of such relationships may be greater than any upside potential financial gain. Unless these business relationships are carefully thought out, the business may jeopardize the friendship. Even when the relationship issues are carefully thought out the risk that the business relationship will damage the friendship is still high.
There are two types of business relationships I’d like to explore. The first type is where friends or relatives develop a partnership (i.e., your friend/relative becomes your business partner); the second type is where either you or your friend/relative becomes the customer of the other.
One of the reasons you might go into business with a relative or friend is convenience. However, if you form a partnership with someone you know, you short-circuit the search and vetting process. You fail to examine candidates that you do not already know that may have excellent business qualities. Another reason is presumed trust. You trust that your friend/relative will always honor your relationship and will not take advantage of you. A third reason you might go into business with a friend/relative is that you assume that your friend or relation has business qualities that you require such as work ethic, skills, and business mindedness because you know and like them.
You figure that you like the person, enjoy being with them, so wouldn’t it be fun to go into business together. You do not have to go through the trouble of vetting (looking into the background of the individual); history with the person serves as assurance that the person is trustworthy. Your assumption is that the person is a good person who can be trusted. But friendship and a good feeling about the person is not sufficient grounds for going into business with another person. Many disappointments can be avoided by being more cautious. But such caution can set of alarms in the other party as if their trustworthiness were being challenged from the beginning. Just as love alone is insufficient for marriage, friendship alone is insufficient for going into business together.
And what about doing business with a friend or relative? What about seeking out the services of a relative or friend, e.g., a lawyer, contractor, physician, financial adviser? All is well when things are going well. That is, when the lawyer gets you the result you wanted, the contractor builds your project to your liking, the physician heals your wounds or illness, and the financial adviser makes you money. But what happens when things don’t turn out quite the way you had hoped or expected? What happens when the lawyer loses the case, the contractor does a lousy job on your project, instead of getting well you get worse, and the financial adviser loses your life savings? What happens to the friendship?
Similarly, what happens if you are running a business and your friend or relative decides to do patronize a different business for the same product or service? Will you feel offended? Will you still want to be friends with them? Will you be irritated if they are always seeking a discount from you or other special favor? How will you react if they don’t show sufficient gratitude? Whether you are the customer or business owner, a business relationship with a friend or relative can affect the friendship.
In wrestling with the question of whether to go into business with a friend, you might consider which type of relationship is easier to form. Is it easier for you to find a friend or to find a customer? Is it easier to find a friend or to find a company to do business with? Is it easier to find a friend or to find a business partner? Personally, I find good friends harder to find. I find business relationships to be much more transient; once the business relationship ends, there is no further relationship. This isn’t to say that some friends or relatives don’t become great business partners; but such success stories may be rare. Nor does this mean that no business relationship can develop into a friendship. I am simply suggesting that with friendships require maintenance and when the focus becomes business, the friendship often gets neglected.
Future blog posts will explore the following questions:
- How can relationships (friends/relatives) be maintained when doing business?
- What happens when a friendship develops in the context of a business relationship? When the business stops what happens to the friendship?
- What happens when a friend chooses to do business with someone other than you? How does that affect your friendship?
- Why are friendships harder to develop than business relationships?
- What can be done to insure that the friendship endures even when the business relationship ceases to exist?
[Please add your thoughts and experiences on this topic in the comment section of this blog. This blog is intended as a forum for folks to raise issues, share experiences, and promote dialogue on important issues of contemporary life. Please sign up as a Facebook Fan at www.docdreyfus.com/fanpage. For additional information about me and my practice, please visit my website at www.DocDreyfus.com.]
Tags: communication, dialogue, intimacy, living consciously, Personal Growth, relationship
