Tuesday, February 1, 2011

Doing Business with Friends: 5 Things to be Upfront About

**This post is a part of a 3 part series on doing business with friends**

Lately I've been dealing with a dilemma that I am sure a ton of entrepreneurs and business owners have to deal with, doing business with friends. In some instances, our friends can be our best clients! The epitome of a quick decision maker and great chemistry. In other instances, working with our friends can be our worst nightmare. They are indecisive and down right disrespectful. It makes you come to a decision: should you do business with friends or should you be very selective with the friends you do business with? The first thing you should do is be upfront with them about everything!

Best Friends--Summer 2009 Pictures, Images and Photos

5 things to be upfront about when doing business with friends:
  • When doing business with friends, most of them expect the dreaded "homeboy hookup." This is when they expect you to conduct business free of charge. Although there is nothing wrong with giving your friend a freebie, you have to remember that once you give them that handout you pretty much ALWAYS have to give them a handout. Be upfront with your pricing for services rendered or product. Break it down for them as to why you charge what you charge and then go into details as to what their particular service or product entails.If they still look confused, provide them with a market compare sheet for other similar businesses to yours (i.e. other event planners/ managers, other tailors/ designers, other graphic designers, etc)

  • What your pricing pays for. When our friends try to talk us into providing them with the "homeboy" discount, usually they are only thinking about themselves and their pocket. Sadly, these same friends don't realize that you too have bills to pay and things to do as well. Help your friend understand what your pricing not only includes, but what it has to help pay for. Now they don't need to see your entire budget breakdown, but they should know that you aren't 100% pocketing the money.

  • couple arguing Pictures, Images and Photos

  • Knowledge. Our friends come to us because they know we have the knowledge to provide them with a quality product or service. Conversely, sometimes when our friends tell us we are overpriced or out of budget it is because they do not know the mechanics of what your position entails. This is due to a lack of knowledge. I've had associates tell me that I make event planning look easy just for them to plan an event for themselves and come back to tell me about the hard time they had planning said event. Knowledge. Providing your friends with your knowledge base will help them to understand why you are in the business you are in as opposed to them being in that business.

  • When we do business with friends, the lines will easily get blurred. Because you have a long history and extensive background, what is acceptable in the friend zone may not be acceptable in the business zone. Let your friends know upfront what you will tolerate and what you won't. Saying this in the beginning sets the tone for how the entire business transaction will take place.

  • If you feel like doing business with your friend is going to be a burden, stress, or bad business...JUST SAY NO! You friendship, business, and stress level will thank you.

Handshake Pictures, Images and Photos

Doing business with friends can be great, but it can also be equally stressful and frustrating. Just before you do business with friends, let them know the right information upfront. Treat them like you would any other client or customer. Just because you two grew up together doesn't take away from the type of service and business YOU need to do.

Stay Tuned for tomorrow's post, "Why you should do business with friends."

The Unemployed Entrepreneur

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