Start-up entrepreneurship stories usually focus on taking risk, even though the best owners are excellent risk controllers rather than wild risk takers. And the focus is invariably on financial risk and overlooks personal relationship risk that accompanies fast-growth ventures.
For example, an entrepreneur’s venture falls apart and so does their marriage. Or they struggle to relate to old friends or find new ones who understand the demands of fast-growth entrepreneurship. Or they spend less time with their children and try to compensate with material possessions.
Or your business partner’s wife wants the venture to pay bigger dividends and their husband to work fewer hours, and you want to reinvest profits and put everything into the business. The relationship with your business partner breaks down and they go from being a close friend to a ‘former colleague’.
What’s your view?
- Does fast-growth entrepreneurship take a big toll on personal relationships?
- Do such business owners often struggle to relate to friends with corporate jobs?
- What is your best advice for keeping relationships strong as your venture grows?
I have interviewed many failed entrepreneurs over the years who lament breakdowns in personal relationships. A failed venture rocks their confidence and leaves them wracked with doubt, feeling isolated, and wanting to withdraw from relationships with family, friends and colleagues. They lack emotional support to start again and recover from business failure.
Or, for a time, they were seduced by the trappings of success, became obsessed with their venture and overconfident. Their relationships took a backseat as the venture hurtled along, even though it was built on the owner’s foundation of a loving family and strong friendships. Inevitably, the business and the owner’s personal relationships failed.
Not all relationships follow this path. Some entrepreneurs have the same life partner for years, their children work in the business, and the venture becomes a crucial part of the family’s identity and a reason to bring people together and understand family values.
Many do not. Several readers emailed me after last week’s blog ‘Entrepreneur failures can be heroes too’ and explained how a struggling venture damaged their personal relationships.
One reader said: “[The blog] really hit the nail on the head for me. I have been through this before and am now going through it again with the launch of a new start-up, especially with regards to the ‘other’ stresses of friendships and marital relations. Glad to hear I’m not the only one.”
I cannot presume to give relationship advice. But I know that strong personal relationships are critical to starting a venture, being emotionally supported, and having family and friends who rally around you if the business fails, or help make your business success more meaningful.
As cold as it sounds, aspiring entrepreneurs should consider how they can control personal relationship risks, just as they plan to control financial risks. Here are some ideas:
1. Understand the risks
Start-up entrepreneurship can at times be an emotional rollercoaster, create odd working hours and different types of stress compared to those with full-time jobs. Relationship breakdowns can also be a business killer, as assets are sold during divorces and the owner is distracted for months. Understand the relationship stresses of fast-growth entrepreneurship before embarking on it.
2. Manage expectations
I suspect many problems arise because family and friends do not understand what entrepreneurship entails. They think you are strange working weekends or late at night, and wonder why you sometimes have cash flow problems, or go without at the start in the hope of cashing in at the end. Explain to loved ones what running a start-up venture is like, so they can know what to expect.
3. Don’t mix personal and business identities
Too often, the owner’s personal identity is wrapped up in their business identity. They take a failed venture incredibly personally and find it harder to recover and try again. It’s not easy, but having some separation between work and personal life – a challenge for many in business – is critical.
4. Find time
It’s easy to say start-up entrepreneurs need to spend more time with their life partner and children. But big sacrifices must be made when everything is on the line, resources are scarce, and people must be fed. Find a way to create time that also fits in with your venture. Working from home, for example, may help you work long hours and still have time with the kids, because hours are not wasted commuting or in useless meetings. I find working late at night creates more time on the weekend with family. Aim to become ruthlessly efficient so you have time for what matters most.
5. Have a plan B
So often, the biggest killer of personal relationships is financial stress. The business owner cannot pay the bills, their health suffers, and relationships implode. Think how you can control personal financial risk: enough money in reserve for six months; a partner with a steady job; manageable personal debt. And as defeatist as it sounds, know when to quit. Hopefully you won’t have to, but too many entrepreneurs persevere with underperforming ventures for too long, out of fear of failure or pride, when the smart move is to fail ethically, reinvest capital and start again.
6. Be prepared for success
Sometimes success is a bigger killer of personal relationships than failure. The venture takes off, the owner rakes in cash, and greed takes over. New people suddenly want to become your friend, you start to mix in different circles, old friends seem dull in comparison. You don’t realise what has happened until it is too late, and your success is empty and meaningless. In the pursuit of building wealth, you destroyed the most valuable assets.