Inevitably in the life of an entrepreneur there comes a time where friendship, money and business collide. Sometimes the collision is disastrous, sometimes it is a saving grace but the one thing that is certain is that it is never easy. I recently encountered a situation where all three of these things collided and here is what I learned.
Be specific and be sure
Communication is the thing that kills most relationships, so it comes as no surprise that this is the most important lesson I learned in this experience. Be specific about what you expect from your friend, what the investment will be used for, the repayment schedule and what they expect to see from the business. I learned that I have an open, up-front communication style and that style really has to be understood by everyone involved. I don’t react based on emotion and I make decisions according to what can be done now.
Be ready to accept blame for everything
In business we know that things go wrong and that deadlines sometimes are not met. What we do as entrepreneurs is accept blame and search for a solution. When your friend is an investor this is what you will need to do as well. Everything that doesn’t go to plan will be your fault and the things that go to plan, but aren’t what was expected will be your fault as well. I suggest taking a class in mea culpa’s.
Be annoyed, but only with yourself
This situation lends itself to all kinds of emotional eruptions, but the best piece of advice I can give is to be annoyed with the person you can actually change-yourself. Remember that the other person doesn’t know you in a business capacity and money of any kind requires that you assess things from a risk adverse perspective. So while they may become a pinger, you cannot. You have to have a level head and a lid on your emotions.
In business it is inevitable that these worlds will collide, what is not necessary is that the collision cause irreparable damage. Situations can be solved and action plans can be changed. All you have to do is be aware of the breaking point of everyone involved by listening. So how can these tips work for you?