A friend and I are looking at starting a clothing business together. He is creative, while I am quite good at the business and finance side. One thing that had crossed my mind was the difficulties that might arise from starting a business with a friend. What would be your advice for anybody looking to start a business with friends or relatives?
Plenty of friends have run successful businesses but the key is to make sure you're separating
business from pleasure and not letting your personal relationship get in the way of your
professional goals. I think it's good that you have different backgrounds, so long as you play to your strengths.
Starting a business is difficult and it can put a strain on any relationship, so be smart. Create a plan, stick to it and maintain an open line of communication. Also, set expectations and make sure that you actually have the same goals for the business. The passion and dedication from each person has to be equal. I've seen many partnerships go sour because one person was swept up in an entrepreneurial "phase" and decided to have a crack and the other one was depending on the business's success to put food on the table. Not having the same expectations for the business from the start can spell disaster down the track, so make sure you're on the same page.
Contracts and agreements made between friends can be awkward but they are vital. Be explicit and have an agreed definition of success and failure. Similarly, have a clear discussion about the "exit strategy" in the event that one partner wants or needs to get out of the business unexpectedly. When you go into a partnership, you have to consider that things might not work out as anticipated and you need to protect yourself.
Start-ups always have unforseen setbacks which can take their toll on the owners. But if you have a solid business plan and a good understanding of the commitment needed to make the business work, you should be just fine. Good luck.
I have run my own business for almost 20 years. In that time I have seen many changes come through the business world and I believe my success is attributable to my ability to adapt my business to the consumer's desire. With that in mind I have seen the rise of social media and am adamant that it is important in order for my business to move forward. I have created a Facebook page and a Twitter account but I have been unable to truly engage with them. I do not know if this is a generational thing but I simply cannot garner much interest. I want to learn, I know I must, but I don't know how. What can you recommend?
I don't think it's a generational thing - I recently joined Twitter and I think it's a great way to talk to people about my business and increase exposure for what my company is trying to accomplish in the financial services space. The key to getting followers on social media is fairly simple - you have to have something to say that is of value to your audience. I don't know what kind of business you operate, but you are an expert and you have something to teach. Whether you own a bicycle shop or you have an accounting practice, you have knowledge that others don't. So use it! Social media shouldn't just be about opinions and idle chatter, there is actually plenty of room to create meaningful content. One thing I recommend is to follow all the news sources that publish relevant stories about what you do - it's a good way to start sharing information with your social media network and it will help you get into the swing of things and better understand how it all works. There are plenty of "how-to" guides on the internet but I think the key is just getting familiar with it and then creating a network that has genuine value.
Mark Bouris is the executive chairman of Yellow Brick Road,
a wealth-management company and small business adviser that sells products and services for home loans, financial planning, insurance, superannuation, investments, accounting and tax. His advice here is intended as guidance only.
Mark Bouris will be hosting his Secrets to Business Success seminar on May 30. For details, go to ybr.com.au.
If you have a question for Mark Bouris, email it to Max Mason at firstname.lastname@example.org.