So Your Friend Wants to Be Your Employee? Read This First
I’ll never forget the first time I realized that not everyone in my business was my friend.
One day the air conditioner went out at my flower shop. My landlord and I had a great rapport over the years, and I considered him to be a friend. So I called him up to fix it.
He decided I had to pay to fix the air conditioner. But he would have the repairman come and replace the unit.
After I hung up the phone I thought, “Wait, this isn’t my problem, it’s his building!” As a brand new business, I didn’t have the $400 to fix the thing and I couldn’t afford to buy a new one.
I felt betrayed. Our relationship never recovered.
For the past six years, I’ve worked with friends in many capacities within my business. I’ve made friends, lost friends, fired friends, hired friends—you name it. I want to save you some heartache by sharing the rules I’ve developed while navigating work friendships as a business owner.
Run payroll and benefits with Gusto
1. Take this friendship risk test
When I was in high school, my friend and I liked the same guy. Then I found out this guy might like me too. So I did what any saxophone player in the homeschool jazz band does when they like the drummer with the mohawk—I made my move knowing damn well that it could ruin my friendship.
Sue me, I was like 15.
But I did think about that before I did it. I knew the risk I was willing to take. I wanted the shot with the hot musician more than I wanted my friend. It was a hard choice to make, and an even harder exercise to go through. But you need to do the same thing.
Ask yourself this:
- Can you hold your friend accountable if something goes wrong?
- If you’re hiring your friend, are they someone you can vouch for?
- Would you be okay with losing your friend if sh!t goes terribly wrong?
If you’re cool with it, proceed. If not, tell your friend this:
“I don’t want business to ruin our friendship. I hope you agree.”
Then hook them up with other business owners that might be able to give them what they’re looking for.
2. Look out for your emotionally intelligent peeps
Before you even think about involving your friends in your business, make sure they have high emotional intelligence. You’ll know this if you can say “mhm” to these two questions:
Can they talk about their feelings?
This shows that they’re self-aware and know what’s going on with themselves. If your friend has the vocabulary to pinpoint exactly what they’re feeling, they’re more equipped to figure out where to go from there.
So instead of them saying “I feel bad,” they say “I feel anxious/frustrated/ridiculously pissed off about the way they talked to me.”
Have you navigated storms with them before?
Think about the worst experience you’ve been through together. If you’ve recovered since then, that’s a good sign. Holding grudges can seriously drag you down when you’re in a business relationship.
3. Define all the boundaries. And write your agreement down.
This is a golden rule in business—write that sh!t down! Have a conversation with your friend IN PERSON before you start any work. Then follow up with an email spelling out the agreement.
Here’s what that email could look like:
Hey [Best bud],
So here is what we chatted about the other day in our meeting:
As agreed, you will be working 12 hours per week on a flex schedule remotely. You are more than welcome to work at home for $19/hour on your own device.
[Hit the highlights: agreed upon hours, rate, work environment, and a plan and time to reconvene]
Let’s plan to meet up once a month to check in on how the project is progressing. Oh, and our employee handbook is attached! Please review, I know you love rules.
If this all sounds good, just reply with “all good,” and I’ll know we’re on the same page. [You can be casual as long as you communicate clearly.]
This email is key. I don’t care how much I trust you, I won’t remember everything I said. And I’ll want to file away the fact that you agreed to the boundaries too.
Pro tip: If you’re in a situation with a friend as a vendor or client, PLEASE sign a business contract just like you would with a regular client. This is even more important if your friend is creating any sort of intellectual property, or IP, that may or may not be your business’s property.
IP includes things like marketing graphics, slides, anything. If you don’t agree to who owns the IP, your business property could get used by your friend for other purposes, or the other way around. For example, the cool graphics your friend is making for you could be turned into art prints they then sell. You might not want that.
So play it safe.
This shouldn’t have to be said, but guess what? I’ve done it! (Or, haven’t done it when I should have.)
How to do it:
- Take a look at this business contract template to give you a place to start. Make sure you spell out the scope of work, payment, terms, who owns the work product, and any other specifics to help prevent confusion on both sides.
- Is the arrangement complex, high stakes, or does it involve a key aspect of the business? If so, consider calling your lawyer to make sure your contract is airtight.
4. Treat your friend like any other employee/customer/client/vendor
Sorry, but working with your friends is still just that—work. I’ve had two issues with this particular point.
I’ve worked harder for friends than I would for just anyone
The problem: If something goes wrong or the person isn’t appreciative, this can lead to resentment.
I haven’t done my best work because I was “helping out a friend.”
The problem: This situation can lead to anger if your friend is expecting you to deliver what you would to a typical client or customer.
That’s why it’s important to see your friend as any other person in your business (when they’re involved with your biz) and treat them as such.
If you’re ever confused about how to treat your friend in a sticky situation, ask yourself how you’d handle it if it was someone you weren’t close with. It’s in your job title as “boss” to make the correct choice from there. If things are sticky or not moving fast enough, you might have to let that person go. Be honest with yourself about their work performance. If it’s not going well, they probably know it too.
To make it semi-bearable, frame whatever you do with the fact that you know you’re friends, but this action is for the benefit of the business.
5. Don’t give your friends discounts. Ever.
When your friends pay full price, it shows that they support you and validate what you’re doing. It shows that they know you’re working your butt off to keep this business alive, and they’re there for you. That message can be huge. And it’s not selfish to keep receiving it.
So if a friend asks for a discount and you’re not okay with it (even if they are an employee), respond with:
“I appreciate that you’re interested in my business, but I’d love it if you could support me and pay my regular price.”
Then stick to it.
But if you do want to give out discounts (and are at a place where you can handle it), tell your friend what the regular price point is and exactly what you’re able to do for them at that lower price. They need to understand where the value lies—and what to expect.
Spending your work days with the people you like isn’t a crime—it’s one of the true delights of being a business owner. The synergistic brain power that comes from working with friends is legit—just do your business a solid and protect yourself first.