In this day and age, especially as a small business owner it can be difficult to not mix business and friendship. Even if you do manage it there are always instances where money comes into the equation with friends and family.
Whether it’s splitting the bill over dinner or agreeing to work with a friend, it’s important to have some ground rules so that everyone feels treated fairly. After all, everyone has a different financial situation and relationship with money. For some people not repaying $50 may seem like nothing whereas for others that may put them in financial distress.
Let’s start with personal situations, instances where you may lend someone some cash because there is no ATM or pay the whole bill for ease. As with all financial transactions it’s important to set the ground rules from the start.
Be careful with the wording that you use eg if you say “Oh I can get this” meaning just for now, until you get some cash, that may imply to someone that you are shouting them and don’t require them to pay you back. So, be explicit, if you expect them to pay you back say “I can pay for now if you like, until we find an ATM, I think there is one down the street”.
If you find that you have that one friend who always says they will pay you back but never does you may want to consider reversing the transaction and asking them to foot the bill and you will pay them back instead. This is also a good strategy if you are short on cash and can’t afford to be out of pocket.
You can also suggest instant transfers such as using PayID, PayPal or apps such as BillPin or Spotme Payments.
We also tend to not discuss financial situations, think about it – do you have any idea what kind of financial situations your friends are in? One of the things that would help is discussing money more. By this I don’t mean complaining about your bank account or disclosing how much you earn. More, talking about issues surrounding money and how they affect you personally. This opens up the discussion around money for everyone.
Let’s talk now about business and friends.
This is a tricky one, especially in such a small city as Perth. It’s very easy to have your personal and business lives overlap. So, if you find yourself with a friend as a client or customer here are some tips:
- Be clear on your terms from the onset. Let them know that there will be a difference between friend you and business you and that when you are on the clock you will treat them just as you would any other client.
- Don’t be tempted to give them “mates rates”, this will only result in you feeling resentful and them expecting special treatment. Not only will this cause you stress but it is also unfair to your other clients.
- If you are catching up for a business meeting or call be clear at the onset – “So, this is business me, I am going to keep this focused on the work we are doing together.”
- Ensure you have clear cut contracts and expectations in place prior to working together so you are both protected.
It is certainly possible to combine business and personal life but it is vital to ensure that you and your finances are protected in all instances. By being proactive and making the expectations clear you can be sure this is the case.