Doing business with friends is a tough business. I’ve had many deals with friends and band mates as the music industry is a relationship business. I created these items to help other succeed with friends while forging mutually beneficial partnerships:
1. Ask questions that could seem “Disloyal”.
Gomes-Casseres says you need to ask those questions that seem “disloyal” to a friend. What is their track record with past partners? What happens if your friend resigns? Are there people in the company who would want to dissolve the partnership?
This kind of analysis is an antidote to blind-love syndrome. Acting in this way is not disloyal at all. It ensures that you will have a good understanding of your partner, which in turn enables you to negotiate and manage a more productive combination. Ultimately, serious business partners will respect your serious due diligence work. And you should expect it of them. Being pro is always key.
2. Assess the friend’s company’s abilities.
You would assume your friend’s company can do what he/she says it can, but that’s a dangerous assumption. What if the friend is holding something back and has always fluffed you about their success.
Evaluate carefully the partner’s true resources and capabilities. Your evaluation may include external analysis by independent parties. Legal contracts seldom protect against a partner simply not having what you thought they did.
3. Explore your options.
Do not let your friendship prevent you from exploring alternative partners. Your friend might not like it, but if there is a better strategic partnership out there you need to consider it.
Explore your options before committing to a friendship partner and make sure it’s the best solution. Your friend will most likely exploit your contacts and relationships with other companies. Be ready for anything because your friend knows your heart. Make sure your friends will have your best interests on point, both personally and in the business gauntlet.
4. Protect your company.(you as a band member or artists)
Alliance isn’t held up by friendship, it’s held up by a legal contract, an agreement where everything is spelled out.
Protect yourself through the legal terms of the deal by building in concrete mechanisms for joint governance. A personal touch, good intentions, and enthusiastic teams are never enough. These need to be supported by a clear division of rights and duties, effective communication, and good escalation procedures, just in case.
5. Go beyond trust.
You need to set good self management practices and rules of the relationship.
By itself, trust is not reliable, and too much trust can be counterproductive. Your trusted personal counterpart may leave, or circumstances may change to make commitments costly. But you can manage the relationship to ensure good communication and encourage mutual partnership. Never hire or partner with someone you can’t fire.
Doing business with friends can be a great thing. It can also cost you friendships and long term relationships. I’ve made good moves and bad moves when it comes to this topic but have learned from each incident. This double dipping isn’t cut out for everyone make sure you can separate the business and the friendship.
SW
(Scott Wilson)