I received the following question from TechRepublic member Francois Bezuidenhout:

I sometimes help out a colleague of mine – who is also an independent ITC – with some of his projects – either they are too big to handle by himself, or he is busy with one client and another crisis comes up – thus we are backup to each other.

My situation is that whenever he does work for me, I have my clients pay him directly, and preferably cash – thus there is no waiting time involved for him. My main priority is that my client is happy. I do not want a ‘cut’ of his money for work that he has done for me – I just want my client happy and leave them with confidence to phone me again when they have a problem.

My colleague on the other hand wants to be in control of everything – he wants to handle all invoicing and money matters regarding his clients (which is fine by me) except that some of his clients take up to 2 months to pay him. And he does not pay me out of his pocket – he waits until the client pays him, then he pays me. This makes it difficult for me, because I know I will get my money, but sometimes I feel like it is a lucky packet draw on what I am getting myself into whenever I do work for him.

To compound my problem – he wants to expand his business and wants me to take certain courses to be able to help him more with his work – which in theory I have no problem with, because the proposed value of work to be done will double my income (maybe even triple) – but I am concerned that this is going to be more late payments – only on a bigger scale.

My question would be – how do you and possibly other consultants handle this?

I can think of a few reasons why Francois might be a little uneasy about this relationship. The first is, as he mentions, the late payment issue. That isn’t going to get any better unless he does something about it. Francois needs to solve that problem before he could even think about getting more deeply involved in his friend’s business.

Some other things to consider include:

Exclusivity. With an increased volume of work, Francois may not have time for his other clients, or he may have to greatly reduce the attention he gives them. If the majority of his business comes from his friend, then his friend somewhat controls his career destiny. Having Francois on board might also free up more of his friend’s time to look for new opportunities — which could be business that Francois would have gotten for himself.
Control. Francois mentioned that his friend likes to “be in control of everything.” It sounds to me like the association could easily drift towards a manager-employee relationship. Pushing him to take some courses may be just the beginning. Francois will need to decide how comfortable he would be with his friend calling all the shots — or else he will need to negotiate a solid decision-sharing agreement.
Philosophy. Francois mentions a couple of differences in how he and his colleague run their respective businesses. What other differences will come out later? You don’t want to wake up one day and find yourself working for a company you can’t believe in.
Friendship. A high percentage of friends that go into business together purchase their partnership at the cost of their friendship. Business relationships require a certain interpersonal distance, in order to be able to negotiate fairly with each other and keep emotions out of it. Business partners often become friends, but there’s usually too much at stake for them to become real pals. Your mileage may vary, but I try (with limited success) to keep personal and business relationships separate. Perhaps that’s not an issue in the present case — I don’t know how close Francois and his friend are.

The relationship could also prove beneficial. Partnerships, companies, and even entire societies form because specialization of duties and economies of scale work to their advantage — sometimes. Other times, they just create unnecessary complexity and cracks for things to fall into. Francois will need to determine which is the case here — or rather, to what degree each one is true.

What do you think Francois should do? Please answer the poll below, and then elaborate in the discussion.

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