By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD
July 17, 2019
Buying a practice with an optometrist friend can be a rewarding, productive experience–or not. Here’s how to decide if this arrangement is right for you, and what you should do to make success more likely.
What names come to mind when you think about friends who founded successful businesses together? Here are a few that came to our minds: Steve Wozniak and Steve Jobs (Apple), Bill Gates and Paul Allen (Microsoft), Larry Page and Sergey Brin (Google), Bill Hewlett and Dave Packard (Hewlett-Packard), and, our taste buds will not let us forget Ben Cohen and Jerry Greenfield (Ben & Jerry’s).
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But not all businesses that were started by friends have happy endings. We all can think of eyecare practices started by friends that ended in ugly divorces. We all know of at least two doctors who went into business together with the best of intentions, but the relationship ended in ruined friendships. Why did that happen? Here are the three most common reasons that good intentions end up badly in failed business relationships:
1) A lack of civility between partners. (Familiarity breeds contempt.)
2) One partner feels they have to consistently do extra work.
3) Undefined roles, sometimes called “Who’s-Really-the-Boss” Syndrome.
Business relationships don’t have to end badly. With a little upfront work, the end result can be positive. Harvard Business Review published an article, “How to Pick a Co-Founder,” that gives us ten “… important things to look for in your entrepreneurial other half.”
1) A complementary temperament.
2) Different operational skills.
3) Similar work habits.
5) A history of working together.
6) Emotional buoyancy.
7) Total honesty.
8) Comfort in her own skin.
9) A personality you like.
10) The same overall vision.
Here are the key points that should be agreed to and in place before going into business with a friend:
1) Be professional while staying friends.
2) Get everything in writing from the very beginning including possible exits, outcomes and the likelihood of total failure.
3) Clearly establish both the practice goals and the owners’ personal goals.
4) Establish separate business and personal bank accounts and perform appropriate bookkeeping. (Never co-mingle business and personal money.)
5) Set up a formal business entity.
6) Define roles in your business.
7) Always communicate and communicate positively.
John D. Rockefeller gave an interesting insight when he said, “A friendship founded on business is better than a business founded on friendship.”