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The risk of business relationships being personal

Written by: Keith Ferrazzi

Article Overview: A young woman came up to me at a talk I was giving last weekend in LA and asked "What if you try to treat business relationships as personal relationships and people use personal things about you against you in business?"

The risk of business relationships being personal

A young woman came up to me at a talk I was giving last weekend in LA and asked "What if you try to treat business relationships as personal relationships and people use personal things about you against you in business?"

It really put me back on my heels.

I thought, That's bizarre. Why would you perceive that the relationships in your life are going to be used against you? And more importantly, why would you guide your life as if that were going to happen.

Maybe there's 1 person out of 100 who would use some personal info about you to their advantage and/or to your disadvantage. But think about the other 99 people. If that fear guided your life, there are 99 people you could have developed great relationships with. You'd miss so many opportunities.

Given that so many of us spend so much time in the work environment, if you showed up at work and were surrounded only by individuals who you kept at arms-length, where your relationships were purely transactional in nature, I just can't imagine that you'd have much success in your career or joy in your life.

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Article Tags: arms length, business relationships, joy in your life, personal info, personal relationships, personal things, risk, work environment, young woman



Related Forum Posts
Risky business? - I follow the rule that you should never do business with friends or family (aside from business, I never borrow from them on a personal level either). It's nice that your friend offered without being asked, and i'm sure he thinks your idea is a really good one or he wouldn't have made that type of offer (to risk money) just out of friendship. I'm sure if he didn't think it woould fly, he wouldnt have made the offer. It's a matter of personal preference whether you want to have a friend (or family memember) be your Angel investor. You both need to understand the risks involved and discuss the "what if's" beforehand....What if it doesn't work out? Does he lose his initial investment? Should you try to pay him back if the business fails, when he offered to take the risk and you didn't ask? These are things that should be discussed and even though you are friends, you should have a lawyer draw up an investment or partnership agreement. Understand it's a business venture and the friendship should have nothing to do with it.
Personal Policy - While I have a personal policy to never do business with family or friends on that level, I do know people who have. For most, it worked out very nicely. I do believe if I were ever to reconsider my personal policy and went for it, I would ensure I had a solid commitment from the partner with a fair partnership agreement in place, drawn up by a lawyer specializing in it. As for percentage of ownership, I believe in all fairness it should be based on who is taking on more risk and also dependent upon how much time each of you will be spending managing the business. There are many factors you both need to take into consderation when making that type of decision.
interested but... - Nana- That was an interesting article, however, it's been my experience as a financial advisor who works SBA franchise loans of 100K - 3 million (daily) that when anyone finances a business via personal resources rather than a business loan, they cannot obtain a working capital loan later on. Should they need it to keep going, they may find themself in trouble. It's better to build a track recrod with a lender right from the start (for future use). It's always better to be in business debt rather than personal debt Lenders tend to take on the attitude that you didnt need them before, so why should they help you now! They simply won't take on the risk. I dont recommend anyone financing themself.
10 best franchises to get involved - I don't think a franchise (or even most businesses) fits your criteria even if you had enough savings to take the risk. Personally, if I were your age and had your aspirations, knowing what I know now, I'd probably look at real estate. Doesn't take near as much money to get your feet wet, and there's nowhere near the risk of most businesses, certainly most franchises. Starting out I'd look at rehabbing houses that I when finished would sell in most places in this country in the $75 - $150,000 range. Bubble or not, there is a huge demand for nice starter homes. I can't think of another business with less downside risk and more potential. The best business could peter out before you're ready for it to. Real estate is forever.
Re: Would you buy a house for a dollar? - What I know is that risk is risk be a dollar or hundreds of dollars. What matter is cross checking the genuity of the business.


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