5 Mistakes You Must Avoid When Doing Business with Friends

Friends can be a business associate. In addition to already know him, do business with them is an effort of mutual cooperation to develop together. Unfortunately, the business with friends often reap discord for various reasons. In the end, you will loose your friend or even worst, he will be your enemy.

You certainly do not want to be like that. You want to do business with friends in a fun and profitable. To realize these desires, avoid the following five fatal error.

1. Over trust to friends

You may have known your friends who do business. Therefore, you give a big trust in him in the business role. This is a mistake that you should avoid. Why? Yes, we are human, especially when it comes to money, often betrayed or lied.

The solution? Do not believe the people alone, but you need to have a system that controls the business. This system is in the form of quality assurance (QA) and quality control (QC) that you and your friends can run together.

2. Calculating profit irrationally

One thing that will be exciting for you when starting a business is the calculation of profits on paper. The more exciting if the profit increase due to a number of proposed parameters of your friends. You also fascinated by the profit on the paper so that it may think that running a business is as easy as turning the palm of the hand. In this condition, you have to calculate the profit irrationally.

In fact, business is full of twists and struggles. Profit on paper does not always correspond with the facts in the reality. Therefore, do your rational profit calculation when starting a business. Do not get too carried away by the sweet lips of your friends profit imagination.

If necessary, put the unforeseen factors when calculating the profit (for example the exchange rate, the fewer the number of customers, and other related issues). It would be better if you ask for advice and recommendation of a trusted financial planner for the financial affairs of your business.

3. No contract or agreement

Never do business with a friend without agreement. Why? Because without a contract, you are legally weak when there is a dispute with your friends later. Moreover, in the absence of an agreement, you will be wasting your time and money.

No excuse, you must make an arrangements with your partner when going to start the business. Include the responsibilities, profit share, and the settlement of disputes that may occur. If necessary, pay a notary or lawyer for better agreement structure.

4. Do not have a regular meeting schedule

Many people who do business with friends does not conduct regular meetings so that their businesses abandoned, zero growth, or even at a loss. That is bad business. You must have a scheduled meetings with your business partners.

You can do it once a week, twice a week, or once a month. This is important because with this business meeting, you can evaluate or review the growth of your business. In other words, in the meeting, you can identify wheter the program is going well or some are not according to the business plan.

For example, weekly sales fell. You and your friends need to analyze all factors that affect the sales. Once known the root cause, you can determine the next steps in order to increase sales. Thus, your business can be controlled properly.

5. Lost focus

One of the factors of the failed business is lost focus. The reason could be tempted to try another business seemingly more profitable. Of course, you should not be like that. Make a commitment between you and your friends to be equally focused raise your business. Leave aside the ideas of other business before the existing business is being run successfully.

In fact, many successful entrepreneurs who focus on business. Thus, they are able to face all the problems they have got. It is true they suffered in advance, but after that they were able to raise its business so that everything else becomes easier.

Running a business with friends has its own uniqueness and challenges. Avoid the five mistakes above when you do business with your friends. Do not compromise with those mistakes if you do not want to loose your friendship just because of business.

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