The BIGG Successs Show
Before Going into Business with Friends, Consider These 8 Scenerios
Tips to remain friends while being business partners. Read our show summary at BIGGSUCCESS.COM.
Welcome to the Big Success Show. Today, we'll discuss eight scenarios to consider before going into business with friends. The Big Success Show, with George and Mary Lynn. What'd you say, Mary Lynn? We're going to do eight scenarios about giving your friends the business. Yeah, no. Oh, that's not it. I guess I misheard you. Where do you come up with these things, George? On top of mine, baby. I don't know. I'm kidding. You know, we've consulted lately with a few groups of people who are friends going into business together. And we've been impressed with the thoughts that they've put into their business and their business plan. And all the development work that they've done on it. The interesting thing, though, is there's one thing that we often suggest that they haven't put as much thought into. And that is the what-ifs of their relationship itself. And this is so important because if you're going into business as friends, you want to remain friends. It's always a good goal. Yes. But business is full of surprises. And discussing these possible surprises up front. Surprise. Before you mix friendship and business can keep your relationship strong while you're in business. And a business partnership is really much like a marriage, right? And as we've seen with at least celebrity couples, sometimes it's good to have a pre-nuptial agreement. And so find a good attorney and draw up an agreement between yourselves. Now, you may think, "I don't need this. My friendship is strong with this person or this group of people." And it probably is. Oh, I was going to say you're probably wrong. Well, when you go into business together, your friendship will be tested more than it ever has before. So it's good to prepare for it up front. So when you're in the middle of it, you already have a lot of the answers. Yeah, because like Mary Lynn, when, you know, we went into business together, man, I made sure every eye was dotted and every tea was crossed or ate. So did I. Well, to figure out what should be in your agreement, sit down with your attorney and discuss all of the what-ifs. And today we'll talk about eight examples of these scenarios. Number one, what if the business fails? Now, there's two scenarios that can happen in this situation. It fails and no one is owed money, which according to statistics is the most likely scenario. That's the easy one to handle. But what if the business does owe money? How are you going to resolve that? Yeah, number two, this sounds weird. What if the business succeeds wildly? Wow. He wouldn't think that's a problem, would you? But the thing is, you'll see people succeed and then maybe a little bit of greed starts entering the picture. There's power struggles and all of a sudden things start getting problematic. So discuss the dream scenario up front to avoid a nightmare. Number three, what if one of you is incapacitated? One of you no longer is able to do their part. How will the others handle this? Will this partner get bought out? Is there a formula for the price? There's a lot to think about if this unfortunate situation happens. Yeah, number four, what if one of you dies? This is similar to what you just said, Marylin, in terms of what you want to think about. But obviously it's even more extreme. First there's the human side. This is your friend, you're grieving. You know, that's to be expected. But you do have a business to attend to. So we still have to think about getting the work done. Does that person's family now have an ownership stake? Do you buy them out? There's all sorts of things that need to be worked out in that situation. So by having all of this figured out beforehand, it makes it easier when you're in a highly emotional state of mind, coming up we have four more what ifs to consider. Today we're talking about going into business with friends and we're talking about eight situations to consider before you start a new venture. Marylin, we've got four down. What's number five? What happens when one of you gets married? Da-da-da-da-da-da-da. That's what happens. I know you thrice. Right. Or you may already be married. What say does the spouse have in the business? Can the partner's interest be owned jointly with the spouse or do you want to restrict ownership to your original group? The flip side of this, number six, what if one of you gets a divorce? The business interest may be a significant asset. You probably don't want a former spouse having even a minority say in your business. It can really muddy the waters as the saying goes. But what restrictions might you place on ownership? Number seven, what if one of you wants out? How will you determine a price? What kind of notice will you require? What is the process? And finally a variation of that when Marylin, number eight, what if one of you isn't pulling his or her weight? How will you determine that for one thing, but then also what can and or will you do about it? Now these aren't pleasant things to think about, let alone talk about. That's for sure. However, you're more likely to discuss them logically now than to try to work them out when you're in the heat of the moment. Yeah, in the bottom line to this whole discussion, get a good attorney who can help you work your way through these scenarios. And also I'm sure it will come up with many more for you to think about before you get started. You can get a written summary of today's show on our site at Big Success. That's big with 2gsuccess.com. And next time we're going camping. Oh, I'll get the fixings for s'mores. S'mores what? Until then, here's to your Big Success. [MUSIC]