NEVER DO BUSINESS WITH FRIENDS OR FAMILY !!!

28 replies
  • OFF TOPIC
  • |
If there was a 10 commandments of business one of them would be:

"NEVER DO BUSINESS WITH FRIENDS OR FAMILY !!!" .... not ever!!!

I can't believe I've had to go through like 4 situations now with friends and also family to learn this valuable lesson. I mean for many reading this you'll probably do what I did and trust them anyway and then lose a friend or two before you "get it". But maybe some of you might take this to heart.

First 1)......... I was just giving him advice. Good advice too. And very general advice on setting up an internet business. And when he starting making mistakes I tried helping him. I told him ..."do your first website on a shoe string budget, DON'T SPEND A LOT if anything setting it up". But no he screwed himself, he took out a big loan and tried to go big time with no experience. Totally lost the money, the business failed. And then in the end he was stressed and heartbroken and ended up blaming me and another friend who were advising him and I rarely ever spoke to him again after. He wanted nothing to do with us. Why? Simply because we had given him business advice. (why he didn't follow correctly) but still he blamed me and my other friend for it. And again 1 friend lost.

Second Friend)............. I gave him an job at my company. It was a "very attractive package", and he was excited about it. When it came time for him to sign the contract I wrote in (as a safety measure) 1 year contract. Following which he would be evaluated to ensure he was worth what I'd be paying him. So that for some reason ticked him off. I guess he thought he'd be golden for life without having to do any work. But again he got mad, didn't sign, and I never talked to him after that.

Third Friend)............ I gave him an job at my company, we were growing at the time. I felt sorry for him, because he was like my biggest supporter, my biggest fan, and an old childhood friend, and he was down on his luck. So I gave him a job. But then he couldn't do the job he promised to do? What was I to do, pay him for showing up at work and doing nothing? So I let him go with a nice severance package. Again same thing, never spoke to this "friend" again.

So after this like 10 years went by. So I forgot this cardinal rule of NEVER DOING BUSINESS WITH friends or family. So I wanted to help out a relative and his wife. They were very close to me. And they had helped me out in the past. So I figured, okay I'm safe to help them out. So I did, on a verbal agreement only, big mistake. Well like 2 year went by. They hadn't honored any part of their verbal agreement.

So I started asking them about it. They were reluctant to want to do anything. And I can't get into a lot of detail, but they almost renegged on the agreement. Well i shouldn't say that. Half of the agreement they basically have renegged on. The other half which was very black and white they ALMOST RENEGGED ON because I didn't have it in writing with them. It was just a verbal agreement with a very trusted direct family member. So you think you could trust them right? NO DEAD WRONG. And then they even tried to make me feel guilty for asking about it and getting them to commit to it. Talk about insanity.

LIKE IT'S TOTAL FRACKING INSANity!!! OKAY I GET IT, I HONESTLY DO THIS TIME!!!

The Rule is: Never ever do business with friends or family. If they need help, just help them find another way. If the situation is dier then ya maybe a small amount of help knowing you'll likely never get paid back from them. If the situation is not dier, then just be supportive, maybe point them in the right direction. But don't bail them out yourself if you expect them to honor any kind of agreement! Well if it's a small amount that's not a big deal I guess. But anything mid to large size and scope in nature, never ever do it. And if you lend them a bit basically do it under the total understanding that you might NEVER GET REPAID, at least from them. But big deals, no way, not ever! But ya in future, I'm done with them. I want to keep them as friends and family, and that's exactly why I never want to do any kind of business with them. Because if things fail, which sometimes happen, so does the relationship more often than not.

It's often some unknown situations come into play after you've gone into business together. After you've made agreements with the friends or family, things could rapidly change. And then one side or the other might not honor their agreement. Like again, in this recent shananogan I just barely got out of it with half of what was agreed to. And that, only after a TON OF NAGGING and drama. Unbelievable.

I'm pretty sure now I'm done. I'm never ever ever going to do business with a friend or family member, not ever. I'll totally help them in a lot of different ways. And if it's a small amount that too isn't a big deal. But any serious agreements are not to be done.

My gosh the life experiences, trials and tests I've had to learn from. I'm so sick of learning the hard way in life already. I'm trying to be extra careful. But still I get screwed at times. But since they agreed to this I think i can still salvage my relationship with them. But it can weigh heavily on the level of trust one has for another party when these things happen. Talk about insane.

I'm telling you, never do business with friends or family. Unless you hate the person and want to lose them, which is likely what will happen.
  • Profile picture of the author tagiscom
    Phew, good advise!

    Yep, l agree, if they are down on their luck and see your success, then they feel that you owe them something or they are entitled to take advantage of your generosity!

    Sorry to be blunt, but that is probably the crux of it!


    When l get the cash coming in, if l had someone who needed help, l would offer advise and assistance, but that is about it!

    Never a job, (too weird) and probably no more than $10,000, if l had less than 1 million for example!

    And if they p*** that away and needed more, l may help them with a CC extension, etc, but unlikely l would offer more cash!


    You are fortunate that you have friends to lose, l lost most of mine over the last 6 years, because l had little to no results online over that time!

    I am sure if Edison was worried about losing friends we would all be using oil lamps!


    If someone gave me $10,000 6 years ago, and said do a cheap site, l might have tried to hard, and stuffed it up!


    But l suppose it all comes down to how mature, the one being helped is!

    Psychoanalysis would help, but not the sort of thing you can tell a friend to do?


    Shane
    {{ DiscussionBoard.errors[8894844].message }}
  • Profile picture of the author seasoned
    The really SICK part is that you COULD do business with what I would call a REAL friend! Such a person would defer to you when asking for professional advice and not blame you because he or she would know that YOU tried your best.

    They would certainly NOT blame you for costing them maybe millions when you told them NOT to spend that money, etc...

    Sadly, such friends are RARE! I have seen some that are SHOCKINGLY trusting and forgiving and others would scream and rant if they paid $10, you said they could make $5000, and they never made more than $4999!

    But yeah, in general, keeping friends and family out of the equation is good advice.

    Steve
    {{ DiscussionBoard.errors[8895362].message }}
  • Profile picture of the author richpeasant
    It's called having an albatross around your neck.
    {{ DiscussionBoard.errors[8895393].message }}
  • Profile picture of the author Kurt
    The times I've tried this, it seems the friend/family has the view that the arrangement means that I'll do all the work and we'll split the profits.
    Signature
    The very best marketing info. No spam. No email. No BS. Plus lots more!
    Warrior Special Deal: get $5 off with this coupon: wfsocialdeal5
    {{ DiscussionBoard.errors[8895831].message }}
    • Profile picture of the author tagiscom
      Originally Posted by Kurt View Post

      The times I've tried this, it seems the friend/family has the view that the arrangement means that I'll do all the work and we'll split the profits.
      Kurt you look a bit stretched at the moment, need to stop paying someone on Fiverr to redo your Avatar image? :rolleyes:


      Shane
      {{ DiscussionBoard.errors[8895885].message }}
      • Profile picture of the author Kay King
        It's a good trait to want to help people you know - and to help those who have helped YOU in the past. It's a kindness to extend yourself and take your time to offer a hand up to someone who needs it.

        It's a fine line to balance that with viewing yourself as a "benefactor". I think when you help those you care about it's best not to expect something in return.

        If you offer a job - make sure it fits the person and provide it as an opportunity for them to prove themselves...not as a handout.

        If you encourage a friend to be excited about a generous offer you've made - be upfront about the terms of the offer. Instead of sliding in a one year term to protect yourself....negotiate with him so he can choose better pay and one year contract - or lesser pay and a longer term. Make him part of HIS solution.

        If you choose a verbal contract - do it in the realization that people don't always "hear" the same agreement. No verbal contract is worth loss of a long term friendship.

        People will disappoint you sometimes - but if you have the ability to help others and you don't try....you might disappoint yourself.
        Signature

        Saving one dog may not change the world - but forever changes the world of one dog.

        {{ DiscussionBoard.errors[8896202].message }}
  • Profile picture of the author hardraysnight
    but many of my clients, hate that word, are friends.....
    {{ DiscussionBoard.errors[8896617].message }}
    • Profile picture of the author seasoned
      Originally Posted by hardraysnight View Post

      but many of my clients, hate that word, are friends.....
      A customer that BECOMES a friend does so because they believe you are giving them a decent break, etc.... In becoming friends, they effectively acknowledge they appreciate your work, etc....

      By CONTRAST, a "friend" may go in and become a customer figuring you will cut them special deals, etc.... HECK, I started a business at a profit that caused my fathers accountant(my father insisted I go there) to laugh me out of his office. He cheated my father, and lost my FATHER'S business TOO! BTW my father's profit margin was FAR higher than mine! Anyway, it was a popular myth that ALL computer software sellers made 100% profit. That may have been true of SOME others SOMETIMES, but wasn't with me. What if some "friend" wanted me to give them a 40% discount?

      It was ALSO a popular myth that a good programmer could make like any computer do anything QUICKLY! It was never true! But some "friends" might insist YOU do your magic. BTW computer programming classes said the OPPOSITE! A COBOL programmer supposed wrote 5 lines per day, and got paid $50 per line. And the average program could be THOUSANDS of lines. I never much believed that, but some companies DO seem intent on making it COMPLICATED.

      Steve
      {{ DiscussionBoard.errors[8897016].message }}
  • Profile picture of the author Floyd Fisher
    Can I ask a stupid question?

    If you don't do business with your friends, then who do you do business with? Your enemies?
    {{ DiscussionBoard.errors[8897233].message }}
    • Profile picture of the author Kurt
      Originally Posted by Floyd Fisher View Post

      Can I ask a stupid question?

      If you don't do business with your friends, then who do you do business with? Your enemies?
      I don't consider everyone that isn't a friend an enemy. Do you?
      {{ DiscussionBoard.errors[8897338].message }}
    • Profile picture of the author BigFrank
      Banned
      Originally Posted by Floyd Fisher View Post

      Can I ask a stupid question?

      If you don't do business with your friends, then who do you do business with? Your enemies?
      With "clients" that I have no personal dealings with. I create an emotional barrier between myself and people I do work for. That allows me to remain objective. Additionally, if I feel the need to jettison them, there are no personal ramifications that can have a lingering effect for years on end.

      It took decades to acquire this stance, but it's one of the best moves I have ever made and I don't regret it one bit. I sleep much better at night knowing that my clients are not my friends and that I do better by not having friends as clients.

      That does not mean that I don't treat my clients in a friendly fashion.

      Cheers. - Frank
      {{ DiscussionBoard.errors[8898384].message }}
    • Profile picture of the author Daniel Evans
      Originally Posted by Floyd Fisher View Post

      Can I ask a stupid question?

      If you don't do business with your friends, then who do you do business with? Your enemies?
      Perhaps only a stupid question if you undermime the value of a "friend".

      Some Facebookers tend to regards pixels as friends...
      {{ DiscussionBoard.errors[8898967].message }}
  • Profile picture of the author pnehal
    such hate - yes. how unlucky... should have seen it coming from a far..I do know some people like (me to friend) --"I want to help you bro" - (the friend) -- "can you really do good work?"
    {{ DiscussionBoard.errors[8897285].message }}
  • Profile picture of the author seasoned
    Luckily, there IS a HUGE chasm between friends and enemies. Enemies are the people who would try to frustrate your life just for the heck of it. Friends would try to think of ways of how to help you and make you happier. MOST people are in NEITHER group.

    Steve
    {{ DiscussionBoard.errors[8897464].message }}
  • Profile picture of the author duvik
    I agree with the OP... I used to (kind of still do freelance) climb trees for a living and I had the cadillac of climbing saddles and spikes. I loaned it to my nephew as he has a landscapping business but sometimes climbs little trees for his clients...

    1 month passes... I ask for it back once a week...

    Another month passes... more excuses...

    Finally I get firm and he breaks...

    He pawned my gear and lost it.

    $500 gone like that. My livelihood wrecked for a spell... all cause his wife was hooked on oxycodone and the junkie bitc... errr, sorry. The chick needed dope and it's expensive I heartell... like $30 for one little pill. It's insanity.

    I have other tales to tell but that one hurt the most. My nephew was like my best bud and he screwed me hard in the rear end without even a reach around... I had the cash to get it out too... That's what broke him into the truth.

    There's a book called "The 48 Laws of Power" I read and one of the laws states that when in business you should hire an enemy over a friend as the enemy will try harder to prove himself whilst a friend will screw you in the end.

    How true that is.

    Thanks for listening to my rant...

    TJ
    Signature

    This is my website, there are many like it but this one is mine... Targeted Leaders If you are interested in making money with Pay Per Call or need lead generation check it out. draws his sword and points it to the URL and then shouts in a Spartan Warriorish manner...This Is Marketing!!!

    {{ DiscussionBoard.errors[8897926].message }}
    • Profile picture of the author tagiscom
      Originally Posted by duvik View Post


      There's a book called "The 48 Laws of Power" I read and one of the laws states that when in business you should hire an enemy over a friend as the enemy will try harder to prove himself whilst a friend will screw you in the end.

      How true that is.

      Thanks for listening to my rant...

      TJ
      We all need to rant sometimes! :rolleyes:

      Probably explains why first world economies need to bring in migrants from relatively poor countries!

      Because the first world economies, (like Australia) population that is unemployed are too lazy to do the kind of jobs they don't want to do!

      I don't see many Aussies doing trolley collecting or minding a fish and chip shop!


      I have walked into a fish and chip shop after a 44 degree C. day, (for Americans, bloody hot) without air con, and l literally couldn't stand the heat for long.

      Better to be outside in 35C. heat than 45?


      The work ethic in some third world countries is very strong, and whether these people tolerating adverse or dead end job conditions is wise or not, is up to the observer!


      A 44C. day is cooking an egg on your car roof hot, l couldn't imagine cooking over a hot stove in almost 50C!


      Ok, l have had a small rant as well!


      Sounds like we need to read some books, before lending or hiring?


      Shane
      {{ DiscussionBoard.errors[8898088].message }}
  • Profile picture of the author MikeAmbrosio
    I don't know...maybe I'm lucky.

    Worked for my father a bunch of years back. One of the best jobs I ever had.

    I hired my brother in law to work in my internet business. One of the fastest learners and hardest workers I ever met. He went like the energizer bunny 12 hours a day.

    Went to work for another friend. Another great experience.

    Had several business partnerships with friends over the years (projects mostly) and never had issues.

    And now, in my current business, I have one son who works for me part time and one long time friend who does contract work for me. Never an issue.

    The ONLY 2 times I partnered with acquaintances (rather than family or close friends) were the only times I got hosed.
    Signature

    Are you protecting your on line business? If you have a website, blog, ecommerce store you NEED to back it up regularly. Your webhost will only protect you so much. Check out Quirkel. Protect yourself.

    {{ DiscussionBoard.errors[8898136].message }}
    • Profile picture of the author BigFrank
      Banned
      Originally Posted by MikeAmbrosio View Post

      I don't know...maybe I'm lucky.
      Paging Mike Ambrosio, party of one.

      Your experience is extremely unique and one I have never heard in my lifetime. I guess miracles can happen - and repeatedly, too. You lead a very charmed life.

      I hope that you are buying Power Ball tickets. Cheers. - Frank
      {{ DiscussionBoard.errors[8898393].message }}
      • Profile picture of the author Kay King
        Good on you, Mike - that's a great way to work. You have the best of it.

        I agreed with 3 different viewpoints.

        -I will work with friends (but only with some friends - others, no). I would work with family (some family that I know would do their share).

        -I've had client and customer relationships with many people I don't know - I consider some of them "acquaintances" but friends don't come that easily to me. Clients are more like co-workers at a job - you know them and care about them but it's a limited relationship.

        -I'd never do business with someone I considered an enemy - no matter how good the money was. But - if asked to name an enemy, I wouldn't be able to think of anyone at the moment.

        kay
        Signature

        Saving one dog may not change the world - but forever changes the world of one dog.

        {{ DiscussionBoard.errors[8898490].message }}
      • Profile picture of the author MikeAmbrosio
        Originally Posted by BigFrank View Post

        Paging Mike Ambrosio, party of one.

        Your experience is extremely unique and one I have never heard in my lifetime. I guess miracles can happen - and repeatedly, too. You lead a very charmed life.

        I hope that you are buying Power Ball tickets. Cheers. - Frank
        Yeah, I always felt kinda lucky. EXCEPT when any form of gambling takes place. Then I am a certified loser

        Which is why I don't gamble. My wife LOVES Atlantic City. I won't go so she goes with her mother.

        Anyway, I decided a LONG time ago that since the average person spends something like 50% (give or take) of their waking hours working then I may as well find ways to be happy. Otherwise you're in for a mostly miserable life.

        I think Dennis hit the nail on the head. Clearly defines roles. I made them when hiring friends/family and made sure they were clear when I went to work for friends.

        It helps that I like what I do, too.
        Signature

        Are you protecting your on line business? If you have a website, blog, ecommerce store you NEED to back it up regularly. Your webhost will only protect you so much. Check out Quirkel. Protect yourself.

        {{ DiscussionBoard.errors[8903724].message }}
        • Profile picture of the author BigFrank
          Banned
          Originally Posted by MikeAmbrosio View Post

          Yeah, I always felt kinda lucky. EXCEPT when any form of gambling takes place. Then I am a certified loser

          Which is why I don't gamble. My wife LOVES Atlantic City. I won't go so she goes with her mother.
          I hear you. I have two problems with that. I have an addictive personality disorder and I'm only 45 minutes away. Of course that no longer matters as we just legalized on-line gambling in NJ which should go a long way to totally destroying thousands of lives in an already economically devastated state. Don't believe the hype about the economic boom in NJ. Total rubbish with a touch of smoke and mirrors. SJ is "Alabama Lite."
          Anyway, I decided a LONG time ago that since the average person spends something like 50% (give or take) of their waking hours working
          Slackers, all.
          then I may as well find ways to be happy. Otherwise you're in for a mostly miserable life.
          Miserable life. There was a point that I would have called you out on redundancy. Fortunately, those days are long-gone.
          I think Dennis hit the nail on the head. Clearly defines roles. I made them when hiring friends/family and made sure they were clear when I went to work for friends.
          I will confess to working with a friend I have had since childhood on a current project of his, but the goals are clearly defined and my task clearly delineated. So far, so good, though I feel weird whenever I send a Paypal invoice.
          It helps that I like what I do, too.
          First rule of achieving happiness.

          Have a great day. Cheers. - Frank
          {{ DiscussionBoard.errors[8903772].message }}
  • Profile picture of the author alexnob
    I think that's right in my situation, you can't treat your friends/relatives like real employers, especially when they get mistakes or not complete their tasks. As a result, company goes down, you lose money and the relationship breaks.
    "DON'T work with your friends"
    {{ DiscussionBoard.errors[8898228].message }}
  • Profile picture of the author bizgrower
    In my experience, it's rare that it does work.

    I used to administer civil/business disputes resolved via
    arbitration instead of court. The most volatile and emotional
    ones involved friends/relatives that had gone into business
    or investing together. Law firm dissolutions were the worst.

    Hiring friends and relatives also seems to backfire most of
    the time because of the real or perceived favoritism issues.
    I think it can cause morale problems.

    I turned down a job because there did not seem to be a way
    to get promotions because of so many sons or nephews
    working in management already.

    When I was in college, I was like a shift manager in a family
    owned pizza franchise. It was hard to supervise (I was young)
    the owners' son and he was one of the worst employees.

    Dan
    Signature

    "If you think you're the smartest person in the room, then you're probably in the wrong room."

    {{ DiscussionBoard.errors[8898327].message }}
  • Profile picture of the author Dennis Gaskill
    I've worked with family quite a lot and never had a bad experience. In fact, right now one of my nephews programs software for me.

    Part of the problem with working with or hiring friends and family is that roles and responsibilities aren't clearly defined in the beginning. You can end up with two different sets of expectations which often collide and create friction and conflict.

    Conflict, hurt feelings, and disappointment are best avoided by discussing expectations and defining the roles and responsibilities before an agreement is entered into. When these are clearly defined and agreed upon, the potential for problems, while always there in any human activity, are greatly reduced.
    Signature

    Just when you think you've got it all figured out, someone changes the rules.

    {{ DiscussionBoard.errors[8898999].message }}
  • Profile picture of the author David Gino
    That's one hell of an advice. It's said "learn from other people's mistakes"
    This is a good one, thanks!
    {{ DiscussionBoard.errors[8903641].message }}
  • Profile picture of the author aceshigh888
    never mix business with pleasure. You need to what's best for business...

    https://www.youtube.com/watch?v=iWRKMSiuHnU
    Signature
    EXERCISE: Take a deep breath, hold for 10 seconds, release. ..... There see you feel better now???
    {{ DiscussionBoard.errors[8906077].message }}
  • Profile picture of the author zinsavage123
    Yep, even when I was a newbie I didn't try to recruit friends and family. Most realistically are too embedded with the 9-5 mentality. I prefer organic traffic, that is actually specified and targeted.
    {{ DiscussionBoard.errors[8906087].message }}

Trending Topics