New Netflix crime film Glass Onion is a cautionary tale — but not about influencers, tech bros, or tongue-in-cheek architecture, as some have claimed. Glass Onion (along with HBO’s Succession) is actually a warning of the potential dangers of doing business with your friends or family.
Such companies make a great contribution to any economy. Globally, between 70% and 80% of businesses are co-owned or co-managed by family members or friends. Close relationships can be a great source of support and have a positive impact on a new idea or venture.
My research, focused on new business development within universities, shows that friends can be successful business partners. Especially for students, entrepreneurship colleges and universities offer a range of support services for friends to achieve business dreams.
Get your tickets for TNW Valencia in March!
The heart of technology comes to the heart of the Mediterranean
There are a few challenges when starting a business with someone that can be easier when you work with people close to you. Founders should trust each other and understand each other’s likes, dislikes, and ambitions. If you and your partner have similar values and approaches to life, you can probably predict how they will react in times of crisis or uncertainty. With this in mind, it is easy to convert an existing relationship into a business relationship.
Of course, things don’t always run smoothly. What can start as the occasional bickering or disagreement over the direction of a new venture can lead to resentment, business (and relationship) decline, and even legal troubles.
A business that involves family or friends can seriously upset the work-life balance—which is critical to business success. The lack of boundaries and extra time devoted to meetings about work can affect your personal relationship and lead to fatigue and resentment. It’s not realistic or healthy to talk about work all the time.
A decades-old family business with the same people at the helm can eventually stagnate and over-rely on the now depleted markets. As with any type of business, this complacency can creep in and affect customer relationships, competitor knowledge and the ability to innovate.
Without proper care, these problems can become commonplace. As in Succession, personality struggles and power grabs can distract from productivity and threaten to derail the organization.
Protect yourself and your company
Before you begin, it’s important to plan ahead. This should include developing a strategy for business partners to exit amicably if necessary. It must also include a consideration of the legal ramifications of a disagreement and a plan to protect ideas, business contributions and other intellectual property.
Research shows that in long-standing family businesses, the existence of known successors can influence how seriously the founders take intellectual property protection. You should also document and register ideas, designs, prototypes, products, processes and slogans with friends and relatives.
Before you sign (or write on a napkin) your ideas, here are five things to keep in mind:
1. Transparency – what is everyone up to?
When you start a new business venture, it’s important to be open about your intentions and goals—short-term and long-term. What drew you all to this potential startup? What do you want to achieve? These are questions you should ask yourself.
2. Security – Get legal advice early on
Along with formally registering the business, owners should consult an intellectual property attorney for expert guidance on how to fairly protect initial and ongoing contributions with appropriate trademarks, patents, and copyrights, where necessary.
3. Prioritize – Stick to your strengths
That’s what gives businesses a critical value: remembering what skills you bring to the table. Even with friends, this is not an opportunity to just hang out and have fun. Yes, you need to enjoy your work, but time, money and livelihood are at stake. A team made up of many people with diverse skills and experiences brings creativity, diverse perspectives and resilience amidst inevitable change.
4. Be kind – Appreciate and accommodate changes in life
Like the volatility of business, our lives can change in an instant. Co-owners should consider changes in work patterns, lifestyle, and important events to maintain health and happiness. This can be particularly relevant when co-owners of a business who are friends are at similar stages in their lives, such as when they retire. B. Starting a family or getting married. Showing compassion and preparing for these factors as they arise can reduce tension and conflict in the day-to-day running of a business.
Robert Crammond, Lecturer in Business, University of the West of Scotland
This article was republished by The Conversation under a Creative Commons license. Read the original article.