Business and relatives

Typical mistakes aspiring businessmen

BUSINESS

Vsevolod Vasev

9/4/20213 min read

If you want to make enemies for yourself, then take money for business from your relatives. Western countries have long used this cliché that the initial investment should be taken from relatives and friends. Oh well. You are sure that by taking the money you will be able to give it back within the agreed period, for example, in a year. This is the delusion of all young businessmen without exception. In a year, your company's revenues will go to zero at best. In the worst case, you will go to minus.

And how were you going to give the money to your relatives? A? You don't have them. Some young businessmen leave the distance, which is called business when they see an amount with a minus sign on their balance sheets.

People are unpredictable creatures, and your relatives are the same people. Suppose that after three months they urgently need money and they turn to you with a demand to return it. You will probably say that you cannot return them, since they are invested in your business and the return period has not yet come. They will insist on their own, not listening to your arguments. They will tell you what kind of businessman you are if you have not earned anything. Indeed, according to their ideas, businessmen row money with a shovel and do nothing at the same time. They will threaten you by going to the police or court.

What are you starting to do?

You take money out of your business and give it to them.

And what happens to you as a result of your ill-considered actions?

You have planned a deal with a supplier, you need to pay rent, you need to pay taxes, pay salaries to employees, you need to pay for the goods. And you have no money.

You tell your supplier that you are terminating the contract with him because you do not have money. You are delaying the payment of salaries to employees. It's the same with the landlord.

The result is predictable, you are destroying your reputation as a conscientious and honest businessman from scratch.

Ask yourself the question: was it worth it? And you yourself tell me the answer: so that I once again contact my relatives? never in my life.

But there is a way out of this situation. Treat your relatives, not as relatives, but as business partners, creditors, investors. Who invest in your business. Make a contract with a notary. In the contract, clearly state the conditions for receiving funds and the conditions for returning funds within a certain period. Make a clause in the contract: special conditions. In them, write down that an early return of funds is possible under certain conditions. With this agreement, you primarily protect your interests.

Never hire relatives for your work. No matter how they ask you and beg you to hire a son, a daughter, and so on. Such kindness on your part will not lead to anything good.

Let me give you an example from personal experience.

I had an aunt. She has a daughter, my cousin. My sister made a contract with me. And the aunt did the work for her. I tried to talk to my sister about the fact that the contract was concluded with her, and not with her mother. And to pay for the work done, I owe my sister. My sister only worked for three days. I paid my sister for the job, only for three days.

As soon as I was not scolded and called names. But, I stood my ground. The one who signed the contract should receive a salary in proportion to the hours worked. As a result, they both left work, taking with them part of their material assets. And here, I gave slack. I did not report my relatives to the police. This was my mistake. Which subsequently cost me dearly.

Conclusion.

Do not take money from relatives if you do not want to make yourself into trouble later. And if you took money from them, then draw up a written contract...

Do not arrange for your relatives, in your business. If you took a relative into the business, then treat him like an ordinary employee. And let your relative know in advance how they will be treated.

There is a golden rule: a businessman has no friends and relatives in business, but only business partners.

This must always be remembered and not forgotten.

In the next article, I will write why you shouldn't take friends into the business. Even if they are best friends and you have known them for many years and do not doubt their honesty.