Why Not To Go Into Business With Family and Friends

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Published by Jim Woods President of InnoThink Group @jimwoods_

 

When I began my business 27 years ago I had no capital. Nore did I have a website or business cards. Similar to many entrepreneurs all I had was passion. Having given my business plan to a highly successful person my church to merely review I went to his home on appointment to receive his appraisal. To my dismay I found my business plan on his door step without feedback.

Terribly heartbroken on the five mile journey home I contemplated my next move. I was stubborn not wanting to obtain advice from other consulting firms. I wanted to do it my way. My motivation to not regurgitate ideas from other firms was simple. I followed the premise of Ayn Rand, “When I could not finds a philosophy I could believe in I was compelled to create my own.”

I considered asking family and friends for money. I knew doing so as Mark Cuban asserted lose control of my business.

I stepped  into the kitchen with everyone absent … and began to cry. Following my 90 second pity party I fell back on my training over the years. “An adversity is just life. Nothing personal.”

Not having one contact in the world I called Whirlpool Corporation. I hadn’t any idea what I would do. Somehow I passed the gatekeepers  to find the President. He must have been in a jovial mood. Perhaps he had won the lottery.

He said what do you do.

I replied business consulting. I did not reveal I hadn’t a name or business cards. I cannot tell you how I found his name or why I called Whirlpool. It was as though I was led.

He said again, “What do you do?”

Again I fell back on my training, “What do you need?”

He said, Team Building. Can you do that?”

I replied. “I sure can.”

Next he asked, “How much do you charge?”

Well, I had never consulted. I assumed a lot would be $125 dollars a day. He replied that isn’t enough.

I gave him another figure biting my teeth. Maybe I’m too high.

He said that isn’t enough.

I said how about $500.00 He said that isn’t enough.

In retrospect he probably knew I was knew wanting to give me a chance.

After a while he agreed to pay me a sum for one days work exceeding the best six months of my life.

Here is my point. Can you run your business on a shoestring? CostCo did it. So did Sam Walton at WalMart who actually began selling used school supplies.

Here ideas from Andrew Arroyo in Inc.

Communicate Clearly

“In a family setting, we sometimes assume that the other person knows what we’re thinking, doing, or planning, and what we expect from them. That kind of assumption certainly doesn’t work in a business environment. We make it a point to communicate clearly and to agree on each person’s duties and responsibilities. We also stress that small irritations, whether from home or work, must be addressed and solved before they result in resentment. Working together can cause a strain on friendships, marriages, or other family relationships, but this awareness helps us approach working together.”

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About

Jim Woods is president of The Jim Woods Group. A management consulting firm. Go here to see his work www.jimwoodsgroup.com. He advises and speaks to organizations large and small on how to increase top line growth in times of uncertainty and complexity. Some of his speaking and consulting clients include: U.S. Army, MITRE Corporation, Pitney Bowes, Whirlpool, and 3M. See more at his website www.jimwoodsgroup.com.

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Posted in Business Coach, Personal Achievement, Small Business

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