Doing Business with Family & Friends

In 1992 I began my first business venture. I started out with a “personized book and card” business. This business relocated from Detroit to Muskegon after my husband took a new job. After moving I adding “clowning” as a means of marketing the books. Soon the clown business was making more income than the book business, but to be honest I just didn’t like getting dressed up and my skin was taking a beating from all of the make up. When I had to buy new equipment and software because my franchise company was “taken over”, I decided to pursue something else. My next venture was jewelry sales which lead into the bra business when the jewelry company was acquired by a bra company. For the last 8 years or so I’ve owned the bra business and about three years ago I began doing web/graphic design and of course freelance writing.

In all of these experiences, my biggest lesson was in conducting business with family and friends. I can’t tell you how many times I was “burnt” so to speak when I was not paid for a product or service. I also had a bad habit of showing favoritism to family and friends and giving huge discounts to them – many times to my own detriment. Now, a seasoned entrepreneur, I have established some ground rules for doing business with family and friends.

1. First, realize that you are offering a quality service and/or product. Don’t think that your family or friends are doing you a favor by patronizing your business. If you have this mindset, you’ll actually probably give away products or services thus hurting your own bottom line.

2. “In God we trust, all others must pay or at least sign a contract”. Business is business. Don’t have one set of rules for one person and another set of rules for another. If your policy is cash upon delivery, then stick with that no matter who it is. They do not get the product until you get the cash. If you require a down payment, then get the down payment up front.

3. Keep your professionalism. It’s so easy to jump into casual conversation and/or get lax when doing business with family and/or friends. This sometimes causes us also to compromise our policies and prices. When meeting with family and friends concerning business, you are Joe Blow, Tax Preparer or Sally Sue, Child Care Provider. Discuss personal issues on personal time. They will respect you for your boundaries.

4. Get it in writing. Be sure to have your policies, terms, prices, etc. in writing and don’t hesitate to give those materials to everyone, no matter who they are. When necessary, get signatures on contracts. Recently I did some web site work for a relative and I made sure to get a signature on the contract. When there was a misunderstanding about services, I referred back to the contract.

5. If you are going to give a discount, be consistent and fair. If you insist on giving a family discount (that’s okay, I do too but I’m more careful and consistent now), give the same discount to every family member and/or friend. It’s nothing worst than Aunt Suzie telling Aunt Barbara that I gave her 25% off of her bra when I only gave Aunt Barbara 10% off of hers.

6. To further ensure that everyone is treated fairly, consider having a family and friends sale day. Only invite family and friends to shop and give everyone the same discount. If you offer a service and not a product, send around a special coupon for family/friends good for services offered between certain dates.

7. Don’t be afraid to pass or decline the business. Okay, we all have some relatives that just are so difficult to deal with. It’s nothng wrong with declining the business when you know it’s going to be a headache. Consider passing on the business to an associate (that’s if the client will do better with someone other than a family member – don’t pass them on if they are going to be a major problem for your associate).

Most important, be sure to give your best to family and friends just as you would any other client. Don’t do shabby work or put their work aside just because their family. Remember to be professional with everything and in all ways. In this way you will gain and keep the respect of family and friends and they will treat you accordingly.