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Is It a Good Idea to Start a Business with Your Friends?

How fun would it be to start your own babysitting or lawn care business with your friends? Here’s what you need to think about before going into business with your BFFs.

Starting a business is all about finding a real-life problem and offering a service or product to solve the problem that people are willing to pay for. Babysitting solves the problem of parents needing someone to watch their kids while they’re away. Lawn care solves the problem of people not having time or being unable to do it themselves.students studying in a group

Sharing the work and responsibility with others can help you grow your business and earn more money. And working with your friends might sound like the perfect plan, but it can quickly turn into a messy enterprise if you don’t figure out how to answer these questions first.

Who pays for start-up costs?

Every new business has start-up costs, which is the money needed to pay for things like business cards, flyers, any training like babysitting certification, gas or repairs for lawn mowers or snow blowers, new rakes or shovels, etc. It’s great if you can borrow these things from your family, but you need to decide what happens if a shovel breaks and who will pay for it. One way is to estimate your start-up costs and then have everyone pitch in the same amount. Or, you could make each person responsible for their own costs. Either way, make sure it’s in writing and everyone agrees on how the money will be used.

What will you charge and how do you divide the money?

Handling money can be the biggest trigger for fights among friends working together. To avoid this, decide on the rates for services (or cost for products if you decide to make and sell something) and make sure everyone agrees to it, and decide how everyone gets paid. Does each person keep the money they make from performing a service? Or does all initial money made go to paying everyone back for their investment in the start-up costs? What if one client insists on paying one of you more, like a tip? Will you share that with the others?

Who talks to customers?

Let’s say you start a lawn care business with friends. Does each person find their own customers to work for, or do you share the work? What if a client calls one of your friends to rake leaves, but your friend gets sick, who will contact the customer and do the work instead? Will there be one email or phone number customers use and then one person decides who takes the job, or does each person have their own customers and you all just share the cost of business cards, flyers, etc.?

Who calls the shots if someone isn’t pulling their weight?

This is the scenario no one wants to think about it when it comes to working with friends: What if one your friends isn’t sharing customers, isn’t doing their share of the work to grow or advertise the business, or is making customers angry with poor work? Before this can happen, outline a plan with everyone about how to handle these situations. The plan might involve having a mentor who can step in and help with guidance.

How do you handle unhappy customers?

In business, it’s inevitable: you will have an unhappy customer. Like the scenarios above, the best remedy is to have a plan in place that everyone agrees on. Decide if you will offer full or partial refunds, who will do make-up work, who the customer can talk to, and how to help each friend learn from an unhappy customer.

Don’t be afraid to start your own business working with friends! But know how to avoid the problems first. Like any project in life, it requires good communication, a well-thought-out plan, and a willingness to learn from mistakes.

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