Trump’s “In many cases, the friend is worse than the foe in terms of trade”, made me think of the importance of having friends in business, but also the challenges of doing business with friends. What is best practice when it comes to combining friendship with business?
I was recently asked about competition within the South African wine industry. Of course, we are in competition with each other when it comes to shelf space and visitor numbers, but SA wine has always been a very supportive industry with advice and cooperation on various levels.
Many of us have gone to school together, have studied together and can even be called friends despite being competition to each other. And even when we don’t know each other well, there is usually an easy cooperation as we have a lot in common and face the same struggles. As an industry, we also embrace the competition. Having a healthy and competitive industry is to the benefit of all in the long term. South African Wine needs variety to be a category and no one is travelling to South Africa or Franschhoek for only a few experiences – a wide, diverse and competitive offering will attract many more tourists!
Friends in business might not mean that you are having each over for a braai, but it is also more than just having a golf buddy for a weekday game. Having friends in business is important and when I am approached to share advice and provide mentorship, I always embrace it. I find that even a platform like LinkedIn creates a community of friends in business where we can learn from each other.
Other than just friendly colleagues, I have had some very successful and exciting business developments with friends where we were able to capitalize on each other’s expertise and because there is trust, we were able to maintain and even expand our efforts. But are we not often warned against doing business with friends and family?
Forbes suggests four pointers for success in any business, but especially when going into business with friends and family.
- Transparency – Clear and honest communication is essential in any relationship, but especially when doing business with friends.
- Priorities – Determining a clear focus and having insight when it comes to each partner’s expectations are essential. Not all values have to align, but they should be communicated and prioritised.
- Fairness – What a tough concept! We might disagree as to what hard work or commitment really entail, but we all want a fair return. In business, Forbes suggest that money is the easiest and best measurable to determine fairness.
- Profit-Sharing – Forbes discourages 50/50 splits, but even more so, joint decisions. Trusting partners to achieve own objectives are important for a business to grow. They also recommend that you stay open to the idea of involving consultants or contractors to complement the skills of business partners where necessary.
A few practical tips from Sergio Marrero on LinkedIn.
- Schedule regular feedback sessions
- Establish a clear chain of command
- Consider separate reporting
- Ensure work/life boundaries
- Discuss exit clauses
- Set expectations right from the start
Sometimes our business requires us to get along and work alongside each other, but there isn’t much of a relationship between partners. The GNU and the power struggle between the ANC and DA are wonderful examples of how not to work together. In this situation, there isn’t any friendship on the table, but unfortunately neither are respect and an aligned vision. With talks of a split, I only have one piece of friend-related advice: Keep your friends close, but your enemies closer!