Don’t do it. Do not do it. Do not do it.
No matter how much money you think you are going to make, do not do it. It is not worth the headache and stress. But, if you are going to do it, here are some safeguards you can always have in place and these apply whether or not you are working with your family, friends, associates, or colleagues.
Do your research and figure out which type of business entity works best for you in terms of how you are going to structure your business. There are corporations, limited liability companies, professional services associations, and so on. Conduct your own independent research and figure out which business entity suits your needs. You need to set up a business entity to protect you as it relates to liability. You do not want to be doing things in your personal name and exposing yourself to any type of personal liability.
You need a separate structure for the funds or however you are going to collect funds. You need to have a separate bank account to where the money will flow. This is SO, SO important.
You need a written document for how matters will be conduct and who will be responsible for what. Roles and responsibilities need to be outlined in the very beginning. You do not want to have any confusion on who is responsible for what and who is not performing their job or carrying out their responsibilities. In addition, you should also establish what happens in the event that someone is not properly carrying out their duties or responsibilities. Have a written document that outlines all of this. Depending on the entity, it can be called two different things. For corporations, this document is known as bylaws. For limited liability companies, this document is known as operating agreements.
If you do not have those things discussed above and the person(s) you want to go into business with does not agree to those things, RUN. Do not do it. It is not worth the headache and stress. The reason for this is because with family, friends, and associates, there are feelings and emotional ties there. You need to understand that there are no feelings in business and make sure that you and the person(s) you are going into any type of venture with also understands this.
Watch the full video here: https://www.youtube.com/watch?v=VwgrqLk2JjM
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