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By Stefania Aulicino
A big birthday of mine was coming up and I wanted to do something different. I asked a friend who has a lovely city garden if I could have a garden party in his backyard. Wili was delighted. He himself is a party guy. As a complement to his profession as a graphic designer and manager of engineering draftsmen, which is how I originally got to know him, he loves to exercise his creative side; he is a skilled interior decorator, clothing designer, and gardener and loves the culinary arts.

We set the date and Wili asked me what I wanted. Something simple. Just the backyard for friends to gather with me. Yes I would bring the cake. And Wili’s sister, who has a side catering business, was engaged to help Wili with the food.

As we got close, Wili did not want to use paper products, but came up with stemmed glasses, porcelain and cloth napkins- in keeping with his eye for proper look for my event. Wili told me we must have cut flowers and we added that to the budget. Wili got the flowers wholesale and arranged then in his own vases.

The party was a smash success. Everyone was amazed at the backdrop of a very intimate garden party with fabulous food, cut and planted flowers and energy contributed by Wili’s entire family who joined our celebration.

Then the problem happened.
I wrote Wili a check for a sum on top of our agreed upon budget- in my mind to acknowledge all the extra expense of the porcelain plates, cutlery and cloth napkins he contributed and the many other little expenses. And of course I wrote his a thoughtful thank you- via email. Oops.

A few months later I did not get invited to Wili’s annual Christmas party. Clearly I had offended Wili in a deep way. In thinking about it, in the face of this wakeup call, I realized not all value can be monetized.

This is the potential issue many entrepreneurs experience when taking money from friends. In hindsight, it was obvious. It is not possible to pay for friendship value. Trying to monetize all value into a dollar exchange can be dangerous.

Wili had accepted my request to help with my party as a friend. I should have thanked him as a friend, by making dinner for him and his family—not trying to pay for his friendship.

In his book Predictably Irrational, The hidden Forces that Shape Our Decisions, Dan Ariely addresses this concept of mixing social norms vs market norms by drawing a picture of a lovely thanksgiving dinner with all the trimmings, arranged by your grandmother. How insulted she would be if you pulled out your wallet and offered $600 or even $1000 as remuneration. You cannot pay for the care and delight that grandma invested for a meal of family members she loves.

That is what can happen when entrepreneurs mix friendship and money.
But it need NOT be negative. You can turn this value exchange around.

Don’t try to pay for all value with just cash.
This is true with clients, vendors, investors even your staff.
Start out with a mutual respect. Segregate the business element and determine the scope which is exchanged in cash- like the budget I created with Wili.
Then, don’t forget to ADD a friendship dimension.
• Perhaps you could invite them to special one on one lunch to discuss your business;
• Send them special, personalized updates on how the business is doing (not necessary asking for their input –depending on their expertise—
• Engage them to some personalized way to be “part” of your vision.

Cash is like food; it’s a basic human need. But like food, it’s not enough for a fulfilled life.
Connection, meaning, acknowledging how much you value someone else for who they are to you is incredibly important.
When you add this dimension to any relationship you can generate even more value to both parties than you could ever buy with just cash.

Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Become a magnet for non equity and equity sources to fuel your growth. Explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com