Making your “partner in crime” your business partner is always a tempting endeavour. But whether it will result in a successful venture or not largely depends on the groundwork you do, or so was informed to us by Michael Dupuis, who practices business law at CBM Lawyers.
Given that they are one of the largest full-service law firms serving Metro Vancouver for over four decades, CBM Lawyers hardly needs an intro. And our recent interaction with Dupuis revealed how friends getting into business together need to take steps to avoid sticky situations.
“It’s like being in a marriage, you are committing to work together for better or worse,” he explained, and went on to share some crucial tips that all business buddies need to know.
Here, they go—
Communicate Openly & Honestly
Honestly, open communication is the basis of any partnership. And entering into a business venture with your friend is no exception. Be sure to discuss your expectations, goals, contributions and roles in the business. Be upfront about any concerns you may have, such as financial commitments, work ethic, or disagreements on the direction of the business. It’s essential to establish a clear understanding of each other’s expectations from the beginning to avoid misunderstandings later on.
Define Roles & Responsibilities
As is the case with everyone involved in a business, you and your friend need to define clear roles and responsibilities for yourself. This will help avoid any confusion about who is responsible for what, and ensure that both of you are contributing equally to the success of the business. The best way is to discuss your strengths and weaknesses and assign tasks that are most suited to your personality, education and skill.
Get Families Onboard & Establish Boundaries
Dupuis confirms that there are two crucial things people often skip when working with a bud. One is getting their families (or spouses, to be more precise) on board. Their support and encouragement can help you through the ups and downs of starting a new business. As well, you will need to review with family how this new venture will affect family finances and time commitments. The other is establishing boundaries. As much as you enjoy your friend’s company, it’s important to establish boundaries between your business and personal relationships. Agree on times when you can and cannot talk about work. This will help prevent conflicts from spilling over into your personal lives and impacting your relationships.
Recent Posts:
This global tech company is expanding to Vancouver bringing hundreds of new jobs
5 Canadian Blood Services perks you can only enjoy as a blood donor
Plan for the Future
Your business buddy and you need to plan for the future and discuss your long-term goals for the business. Consider potential challenges and plan how to overcome them. You also need to discuss what happens if one of you wants to leave the business for some reason or if the business fails. By planning for the future, you can ensure that you are on the same page and working towards the same goals.
Talk to Experts & Family Members
Starting a business with a friend can be pretty complex and challenging. So it’s essential to seek advice from experts. Consider talking to a lawyer, accountant or bookkeeper, lender, etc. These professionals can offer valuable insights into the legal and financial aspects of starting a business and help navigate the complexities of the process. This will help avoid common pitfalls that can arise when starting a business. As it happens, Michael Dupuis and the team at CBM Lawyers can guide you through most of your concerns.
Have a written agreement
It’s essential to have a written agreement outlining the terms of the partnership. This should include details such as ownership percentages, financial contributions, decision-making processes and profit-loss sharing. A written agreement ensures that both friends have a clear understanding of the terms and expectations of the partnership. Yes, Michael can help you with this. He is, after all, a business law practitioner.
Michael assures that following these tips (and more) considerably increases your chances to succeed in business without impacting your friendship negatively. Whether it is an innovative idea you are brainstorming or a franchise you are considering taking on, we suggest getting in touch with Michael Dupuis at CBM Lawyers before taking the leap.
CBM LAWYERS
