Category: Business News

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Its pleasures range from a visit to the stately Arundel Castle to flight delays at Gatwick airport.

Yet it seems West Sussex offers retirees the best possible lifestyle.

In a quality of retirement index, the county has overtaken Dorset as the top place for pensioners to live.

The research, from Prudential insurance, is based on a range of criteria including access to healthcare, crime and the weather.

The study looked at the 55 counties in England and Wales, but excluded Scotland and Northern Ireland.

Sunny weather

The south coast county is already so popular with the over-65s that it has the second-highest inflow of pensioners, after Devon.

It also scores well for ongoing health, high pensioner incomes, and relatively sunny weather.

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• Wales happiest place to live in UK

• People in Fife are the happiest in Scotland

Dorset was in second place, with East Sussex and Devon next in the rankings.

Pensioners in Surrey enjoy the highest income, those in Gwynedd have the best access to healthcare, while residents of Essex get the nicest weather.

But the Isle of Wight has the highest concentration of pensioners overall.

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President Trump is scrapping plans for a business panel on infrastructure, according to US media reports.

A White House official said the infrastructure panel, which was still being formed, would not go ahead.

The decision comes after two other White House business councils were dissolved on Wednesday amid an exodus of chief executives.

Business leaders quit over Mr Trump’s handling of violent clashes in Virginia involving white supremacists.

Bloomberg, CNBC and political newspaper The Hill reported that the president’s planned Advisory Council on Infrastructure “would not move forward”.

Mr Trump’s reaction to last weekend’s clashes at a far-right rally – which left one woman dead and nearly 20 people wounded – has sparked outrage and generated global headlines.

On Monday, Mr Trump belatedly condemned the white supremacist and neo-Nazi groups that rallied in a small Virginia town on Sunday.

But in a rancorous news conference on Tuesday he backtracked and again blamed left-wing counter-protesters for the violence too.

That prompted business leaders to quit his manufacturing and policy councils, and drew criticism from the bosses of other large US firms including Apple and JP Morgan.

Mr Trump signed an executive order last month establishing the Advisory Council on Infrastructure.

At the start of the year he said he was planning the council and named two well known New York property developers to lead the group.

Representatives for Steve Roth of Vornado Realty Trust and Richard LeFrak of LeFrak, whom Mr Trump named last winter, could not be reached immediately.

Most entrepreneurs love what they do — it’s why they became entrepreneurs in the first place. That said, it’s also important to know when to take some time for yourself. You can’t spend every single day grinding without taking a break or you’ll burn out.

That’s why, in this video, Entrepreneur Network partners Chris Haddon and Jason Balin give you some tips on making sure your business keeps running smoothly while you’re on vacation, starting with this simple step: Make sure you can trust your employees and coworkers. If you can, then you can fill in for one another without missing a beat. Good employees will know exactly what you need to know ASAP — vacation or not — and what can wait. 

Click play to learn more.

Related: Why Your Customers Should Be Your Friends

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What content do you use in marketing your firm? And what content should go in which place?

Your company typically has seven layers of content marketing. In descending order of importance, they are:

1. Reputation
2. Website
3. Email templates
4. Social media
5. Events
6. Deck
7. Virtual data room

At HOF Capital, we try to manage these layers to be MECE (Mutually Exclusive, Collectively Exhaustive). When I was a strategy consultant, I used the concept of MECE to structure client problems into clean buckets of analysis. The idea of MECE is fundamental to how we run internal processes at our firm. 

Specifically, the content for the seven layers are:

1. Reputation 

Jeff Bezos said, “A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” By definition, it’s unwritten, but critical.

Related: 8 Mistakes Business Owners Make Creating Their ‘About Us’ Page

2. Website

To the maximum extent possible, in our marketing materials and LinkedIn profiles, we ban adjectives. I really dislike seeing companies or individuals say that they are “prestigious,” “influential,” etc. Those are not normally quantitatively defensible, and belong in the reputation layer. Your marketing materials should show, not tell. Of course, we do try to demonstrate quantitatively the aspects of our story we think are worth highlighting. And if the press wants to use positive adjectives, that’s great. But, when writing about a firm in its own voice, I like numbers, not adjectives.

3. Email templates 

We have an ever-growing collection of email templates for origination, marketing, fundraising, recruiting, negotiation, etc. Every team member is expected to use those templates as the basis for their correspondence. These often link to specific pages on our website. 

Related: How to Create Content That Hooks Your Prospects and Keeps Them Engaged

4. Social media

To the extent possible, we try to use our social media presence to point back to our website, our partners and/or our portfolio companies’ websites. Fundamentally, we control our web presence. But Facebook, Twitter, Medium and other social platforms control the extent to which people see the content we publish there. I don’t like creating content proprietary to someone else’s platform when they’re not paying us to do it. So, we don’t create unique content on someone else’s platform, without at a minimum also publishing it on a site in our immediate corporate family.

5. Events 

We currently participate in events as speakers and plan to continue hosting periodic events to build awareness around our fund and portfolio companies. We don’t normally distribute literature at these events, but we do prepare FAQs beforehand (not for distribution) to make sure that we’re all aligned on our talking points.

Related: The Myth of the 8-Second Attention Span

6. Presentation materials 

Our deck is for material which for legal or other reasons we cannot put online. There is some inevitable duplication here of the website content.

7. Virtual data room 

This is the granular content that only investors doing due diligence on your firm will assess, or perhaps a potential client who is thinking of writing a large check. For MECE purposes, whenever one of our potential clients (a limited partner) give us questions, many of our answers are along the lines of, “Please see the slide __________ in our deck” or “See http://hof.capital/______ .”

Most new and existing businesses can benefit from outside funding. With such funding, they can grow faster, launch new initiatives, gain competitive advantage and make better long-term decisions as they can think beyond short-term issues like making payroll.

Related: I Was a Contestant on ‘Planet of the Apps’ and Got a $5-Million Investment. Here Are 5 Things I Learned From the Experience.

Unfortunately, though, most entrepreneurs and business owners make several mistakes that prevent them from raising capital. These mistakes are detailed below. Avoid them and funding could be yours.

Making unrealistic market size claims

Sophisticated investors need to understand how big your relevant market size is and if it’s feasible for you to eventually become a dominant market player.

The key here is “relevant” and not just “market.” For example, if you create a medical device to cure foot pain, while your “market” is the trillion-dollar healthcare market, that is way too broad a definition.

Rather, your relevant market can be more narrowly defined as not just the medical devices market but the market for medical devices for foot pain. In narrowing your scope, you can better determine the actual size of your market. For instance, you can determine the number of foot pain sufferers each year seeking medical attention and then multiply that by the price they might pay for your device.

Related: Pitching to Sharks: 7 Ways to Get the Attention and Respect of Investors During a Pitch

Failing to respect your competitors

Oftentimes companies tell investors they have no competitors. This often scares investors as they think if there are no competitors, a market doesn’t really exist.

Almost every business has either direct or indirect competitors. Direct competitors offer the same product or service to the same customers. Indirect competitors offer a similar product to the same customers, or the same product to different customers.

For example, if you planned to open an Italian restaurant in a town that previously did not have one, you could correctly say that you don’t have any direct competitors. However, indirect competitors would include every other restaurant in town, supermarkets and other venues to purchase food.

Likewise, don’t downplay your competitors. Saying that your competitors are universally terrible is rarely true; there’s always something they’re doing right that’s keeping them in business.

Related: VC Jeremy Liew on the Biggest Pitch Mistake He’s Seen, and It’s a Doozy

Showing unrealistic financial projections

Businesses take time to grow. Even companies like Facebook and Google, with amazing amounts of funding at their disposal, took years to grow to their current sizes. It takes time to build a team, improve brand awareness and scale your business. So, don’t expect your company to grow revenues exponentially out of the gate. Likewise, you will incur many expenses while growing your business for which you must account.

As such, when building your financial projections, be sure to use reasonable revenue and cost assumptions. If not, you will frighten investors, or worse yet, raise funding and then fail since you run out of cash.

Presenting investors with a novel — or a napkin

While investors will want to meet you before funding your business, they will also require a business plan that explains your business opportunity and why it will be successful.

Your business plan should not be a novel; investors don’t have time to wade through 100 pages to learn the keys to your success. Conversely, you can’t adequately answer investors’ key questions on the back of a napkin.

A 15- to 25-page business plan is the optimum length to convey the required information to investors.

Related: 4 Ways to Predict the Result of Your Investment Pitch

Not understanding your metrics

How much does it cost to acquire a customer? What is your expected lifetime customer value?

While sometimes it’s impossible to understand these metrics when you launch your business, you must determine them as soon as possible.

Without these metrics, you won’t know how much money to raise. For instance, if you hope to gain 1,000 customers this year, but don’t know the cost to acquire a customer, you won’t know how much money you need for sales and marketing.

Likewise, understanding your metrics allows you and your team to work more effectively in setting and achieving growth goals.

Acting like know-it-alls

While investors want you to be an expert in your market, they don’t expect you to be an expert in everything. More so, most businesses must adapt to changing market conditions over time, and entrepreneurs who feel they know everything generally don’t fare well.

A good investor has seen many investments fail and others become great successes. Such experiences have made them great advisors. They’ve encountered all types of situations and understand how to navigate them.

If you’re seeking funding, acknowledge such investors’ experiences. Let them know that while you are an expert in your market, you will seek their ideas and advice in marketing, sales, hiring, product development and/or other areas needed to grow your business.

Related: Pitching to an Investor? Sell Yourself, Not Your Idea.

Focusing too much on products and product features

When raising funding, you need to show you’re building a great company and not just a great product or service. While a great product or service is often the cornerstone to a great company, without skills like sales, marketing, human resources, operations and financial management, you cannot thrive.

Furthermore, if your product has a great feature, be sure to specify how you will create barriers to entry, such as via patent protection, so competitors can’t simply copy it.

Exaggerating too much

When you exaggerate to investors who know you’re exaggerating, you lose credibility.

One key way to exaggerate is with your financial projections as discussed above. There are many other ways to exaggerate. For instance, saying you have the world’s leading authorities on the XYZ market is great, but only if they really are the world’s leading authorities.

Likewise if you say it would take competitors three years to catch up on your technology, when investors ask others in your industry, they better confirm this time period. If not, your credibility and funding will be lost.

Related: The One Question You Must Be Prepared to Answer When Pitching Investors

Lacking focus

What do investors care about? They care about getting a return on their investment. As such, anything you say that supports that will be welcomed.

For instance, talk about your great product that has natural barriers to entry. Discuss your management team that is well-qualified to execute on the opportunity. Talk about strategic partners that will help you generate leads and sales faster.

But, don’t go off on tangents that don’t specifically relate to how you earn investors returns, like the fact that you’re a great tennis player.

Likewise, conveying too many ideas shows you lack focus. For instance, saying you’re going to launch product one next year, and then quickly launch products two, three and four, will frighten investors. Why? Because they’ll want to see product one be a massive success before you even consider launching something new.

Investors have two scarce resources: their time and their money. Avoid the above mistakes when you spend time with investors, and hopefully they’ll reward you with their money.

Change isn’t comfortable — especially when it comes to industries steeped in tradition, such as accounting. Whether they welcome the innovation or loathe the disruption, accounting firms are forced to adjust as their previously static sector grapples with major change.

Asian brokerage firm CLSA recently released a report detailing the future of technology in the accounting world. While the shockwaves of cloud storage technology still reverberate, the report indicates accountants won’t have much time to rest. Machine learning, the gig economy and AI are poised to disrupt the industry even further.

We’re living during a watershed moment for accounting, which creates repercussions throughout the business world. It’s the end of accounting as we know it, but entrepreneurs should feel fine. A new normal will rise from the ashes of the archaic industry, and this revival will lower costs and increase transparency for businesses in every sector.

Why accounting needs a reboot.

As an industry, accounting has been broken for decades. It holds onto the old ways of doing things, even in the face of inevitable change.

The rise of personal computers in the 1980s turned the profession on its head, with software empowering business owners to handle their own bookkeeping and finances. Accounting became a more commoditized profession because of technology, forever altering the dynamics between accountants and business owners. Unfortunately, accounting firms didn’t get the message.

People running accounting firms tend to be older, less comfortable with technology and unfamiliar with new tools. As a result, there is little incentive for junior team members to innovate. Their clients end up missing out on opportunities for increased efficiencies or other areas of improvement.

For example, I have met countless business owners who were in the dark about their company financials because of outdated technology. If your accountant is still working on the desktop version of QuickBooks — or keeping records in shoeboxes — he or she is the only one who has access to your financials. Unless you can convince your accountant to embrace QuickBooks Online or similar cloud software, you’re basically unable to track your company’s performance.

Beyond glaring technical issues, many accountants stubbornly adhere to antiquated traditions. Firms stifle rising talent by enforcing lengthy wait times for partnership — sometimes up to 10 or more years. This sort of inflexibility pushes ambitious young workers and creates a stagnant culture. An established accounting firm feels reliable, but entrepreneurs who work with these companies receive obsolete service instead of innovation.

Despite these incredible inefficiencies, accounting firms still manage to sustain bloated profit margins. As one of the most lucrative trades in the nation, the accounting industry enjoys net profits averaging 18.3 percent of sales — the highest of any sector, according to Sageworks. If their net profit margins are nearly 20 percent, their gross profit margins must be closer to 60 percent.

Accounting firms certainly don’t mind those hefty profits, but their clients will begin to question bloated bills for second-rate service. Entrepreneurs could easily receive better treatment for less money, but these fossilized firms have had no reason to change their ways. This excessive wiggle room also creates space for newcomers to disrupt the industry. As Amazon CEO Jeff Bezos eloquently stated, “Your margin is my opportunity.” Ready or not, change is coming to accounting.

The dinosaurs of the accounting industry are dying, but new entrants are ready to embrace technology, provide better customer service and offer increased transparency. Amid this accounting renaissance, it’s still important to consider a few basics:

Related: 3 Red Flags That Your Tax Accountant Is an Idiot

1. Understand the differences between various titles.

Bookkeepers, accountants, analysts and CFOs all do different things, but that isn’t always clear to outsiders. We’ve had many clients ask for a CFO, for example, when they actually needed a bookkeeper. Considering the average CFO could earn nearly eight times the salary of a bookkeeper, it’s important to pick the right person for your needs. Don’t let big accounting firms strong-arm you; educate yourself on the role you need to fill, and learn to ask for what you want.

2. Ask potential partners probing questions.

How will this firm support your businesses through different growth stages? What resources do they have? How have they adopted new technologies? If they have served others in your industry, request references. Ask which tools they recommend clients use — including examples such as Recurly, Xero and Kabbage — and see whether they offer blank stares or useful insight.

Finally, ask about their system of checks and balances. How will they assure you their work is correct? How are they billing you? Which deliverables will you receive regularly? Don’t be afraid to ask difficult questions; you’re trying to find the perfect partner for your business.

Related: 10 Questions to Ask When Working With an Accountant

3. Consider every available option.

While a local mid-market firm might be ideal for your company, don’t feel like you’re limited by traditional arrangements. Bench, for example, uses artificial intelligence to deliver bookkeeping services to small businesses and independent contractors.

If your company is beyond that initial growth stage, you could embrace the gig economy and use freelancers to handle your accounting. Marketplaces are infinitely more efficient than antiquated accounting firms, creating potential cost savings for business owners. Considering that a Randstad study found that 68 percent of employers believe half the workforce will be part of the gig economy by 2025, it doesn’t hurt to familiarize your business with this growing trend.

4. Seek like-minded partners.

According to CultureIQ, 73 percent of employers believe a better corporate culture provides a competitive edge. Go through a values exercise to solidify what your company stands for, and associate yourself with companies that share those ideals. If you trust your employees while encouraging openness and flexibility, seek modern accountants that buck the old trends and mesh with your approach.

Related: Want to Preserve Your Company’s Culture as You Grow? Here Are 4 Ways

5. Stay on top of trends.

Most trends don’t manifest overnight. Read books and articles, listen to podcasts and talk with others in your industry to see which way the wind is blowing. If you haven’t already — IDG Enterprise reports about 70 percent of companies have at least one application in the cloud — use cloud computing to make it easier to share your financial information internally and with external partners.

Are you still clinging to paper receipts? Get with the times by embracing digital platforms to track and organize expenses. Apps such as Expensify and Wave can do a lot of the work for you, but you can also just snap photos and keep them in a designated receipts folder. Stop sending snail mail invoices, and start emailing those documents to clients. These steps might be painful, but they’ll make it much easier for your bookkeeper or accountant to see exactly what’s going on with your finances.

The accounting industry might be broken, but that doesn’t mean entrepreneurs can throw their arms up in disgust and neglect their finances. As upstarts break into the field and offer accounting solutions that match the modern marketplace, the landscape will undergo tremendous change. Regardless of your solution to this accounting problem — a midmarket firm, an in-house accountant or a team of freelancers — it’s necessary to know what you’re getting yourself into. Your company’s livelihood literally depends on it.

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The UK’s two biggest DIY chains, B&Q and Homebase, have both reported a slide in sales this summer.

B&Q said sales at its established stores fell 5% in the three months to July amid a drop in demand for garden furniture and other summer products.

The fall dragged shares in B&Q owner Kingfisher down 4.1%, making it the biggest faller on the FTSE 100.

Meanwhile, Homebase reported a similar drop in quarterly sales under its new Australian owner.

George Salmon, an analyst at Hargreaves Lansdown, said: “It looks like Kingfisher isn’t alone in having difficulties in the UK.

“The group’s flagship B&Q chain saw like-for-like sales fall 4.7%, which is similar to the 4.3% fall at Bunnings UK, the new owner of Homebase.”

As well as the Bunnings DIY chain, Wesfarmers also runs the supermarket chain Coles and the Kmart and Target chains in Australia.

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Bunnings

Sales of summer products dropped nearly 11% at B&Q, partly because customers bought more of those items during the warm spring.

Kingfisher said it remained cautious about the economic outlook for the UK in the second half of the year.

However, its other DIY chain, Screwfix, continued its stellar run, with sales at existing stores rising 10% in the period.

‘Long slog’

Homebase’s results were partly dragged down by its transition under its Australian owner.

Bunnings UK, which bought Homebase for £340m last year, is changing the DIY retailer’s discounts and rebranding more stores under the Bunnings name.

In the first financial year since acquiring the chain, Bunnings UK booked a £54m loss on revenue of £1.2bn.

Bunnings Group managing director Michael Schneider told analysts it was braced for a “long slog” in the UK.

“The opportunity for the Homebase stores is going to be more clarity and consistency in execution,” he said. “There’s no silver bullet.”

Recently I wrote about what I consider to be one of the big new trends in the franchise industry, which is the emerging healthcare franchises. I point out my reasoning for this in the article “Healthcare Franchises May Be Just What the Doctor Ordered.”

I continue to investigate new healthcare franchise models to feature. I was introduced to Matt Hale and Chad Everts from Modern Acupuncture, an emerging franchise that is on track to be one of the fastest growing franchises in the nation. Hale and Everts’s mission, along with the company’s other founders, is to “make your life better.” They aim to do that through making acupuncture mainstream and improving patients’ lives, through providing consistent, well-paying jobs for licensed acupuncturists and through providing an amazing business opportunity to franchisees.

Hale and Everts have a long history building successful franchise brands. Previously, Hale was both vice president of operations and a founding member of the management team at The Joint Chiropractic, with the likes of the founder of Massage Envy. Hale has also owned and operated his own franchise restaurant, giving him a deep understanding of franchising that he draws upon as CEO of Modern Acupuncture.

Everts was vice president of development and a founding member of the management team at The Joint Chiropractic for six years, also with the founder of Massage Envy. Everts became the chief development officer for ACU Development, LLC, franchisor of Modern Acupuncture in September 2016.

The company leaders have leveraged their many contacts in the franchise world to recruit experienced multi-unit operators to join the Modern Acupuncture franchise organization. What they have done so far is pretty incredible for a startup. The regional developers and franchisees on board all have serious experience with brands like European Wax Centers, Massage Envy, Amazing Lash, Hammer & Nails, The Joint and many others.

Modern Acupuncture has one operating unit in Scottsdale, Ariz. Since launching in December 2016, the company has already awarded 288 regional developer licenses and has signed over 75 individual franchise locations. The second location is slated to open in Charlotte, N.C. in September, closely followed by Colorado Springs, Colo., Austin and Houston, Texas.

Among the benefits of this model is the fact that acupuncture is a 3,000-year-old practice and Modern Acupuncture is the first to organize under one brand, offering accessibility and value to the general public.

The initial franchise fee for Modern Acupuncture is $29,500, and the total estimated initial investment ranges from $248,825 to $443,350.

Everts mentioned that acupuncture is recognized by the American Medical Association and is more popular in the mainstream today. Many are finding benefits for pain treatment as well as overall health and beauty.

Similar to many other medical careers, an acupuncturist needs a graduate degree to practice. Masters, doctorates and post-graduate certificates are available from more than 55 acupuncturist schools across the country. Hale says that there are approximately 30,000 licensed practitioners in the U.S. and the franchise owners are finding it easy to recruit great people to work in its locations.

The company states on its website that “We deliver affordable acupuncture in first-class high traffic retail shopping centers with convenient hours including nights and weekends.”

Franchising has standardized many industries by organizing strong business owners under common brands and creating collaborative business environments resulting in synergistic growth. Modern Acupuncture is another great example of a franchised healthcare model bringing benefits to operators, employees and consumers.

The Modern Acupuncture founders have assembled a talented and experienced team in preparation for aggressive growth.

As I mentioned in my recent article, “5 Strategies for Franchise Leadership Development,” the No. 1 factor in the success or failure of a franchise organization is leadership. Modern Acupuncture is a great example of how a franchise organization can grow when the leadership is committed and experienced. Smaller emerging franchise brands can learn from its example and implement the best practices featured in Franchise Bible, 8th Edition to join the ranks as a national, or even global, franchise brand.

This model appears to be a good fit for single unit operators as well as multi-unit franchisees. Visit the company’s website to learn more about Modern Acupuncture and its franchise program.

One of the best perks of being a business owner is having complete control over whom you hire and whom you work with on a daily basis. You can select people who are genuinely talented and whom you get along with, to create the most ideal, productive, and comfortable environment for your own daily responsibilities.

Related: Managing People Is an Art: 32 Ways to Do it Right.

But there’s a catch. As a boss and leader, you aren’t going to be on the same hierarchical level as the people you hire. If you like them personally, and get along with them, you might be tempted to become friends with them — but is this a good idea? Or are workplace friendships as an entrepreneur destined for failure?

The benefits of workplace friendships

There are some significant benefits that come with having genuine friendships in the workplace:

Employee retention. Studies consistently show that having friends in the workplace drives higher employee retention. One survey found that 30 percent of US workers surveyed said they felt they had a “best friend” in the workplace, and 75 percent planned to stay with the company for at least another year, with more than half feeling passionately close to the brand they worked for. If you strike up more friendships with your employees, you may be able to reap this benefit.

Stress relief. Close relationships with coworkers have a profound effect on stress levels. When you’re around people you know and get along with, you feel more comfortable expressing your feelings, and you don’t feel as much pressure or isolation when things go wrong.

Honesty. If your employees feel that they’re your friends rather than your subordinates, they may be more likely to share criticisms and feedback with you. Otherwise, they may withhold any reservations or objections they have, in an effort to stay in their place.

Related: The 10 Golden Rules of Effective Management

The entrepreneurial complication

Of course, these benefits are perhaps best realized between coworkers at the same level. If you try to make friends with your employees, you’ll likely experience the following dilemmas:

Favoritism. Even if you’re friends with some of your employees, you probably won’t be friends with all your employees. That’s immediately going to make people suspicious that favoritism is occurring. Did you award that employee a raise because he was your friend or because he earned it? Did you reprimand a different coworker because she screwed up, or because she isn’t that close to you personally?

Emotional crossover. Startups are high-stress environments, and that’s going to lead to some emotional crossover. A rough day at the office could lead to a personal argument that permanently damages your friendship. A personal disagreement outside of office hours could compromise how you and your employee work together the next day. There are many opportunities for harm here that you’ll have to avoid.

Hard decisions. Eventually, you’ll have to make some hard decisions that could affect both your personal and professional relationship. What if you find out your friend has been stealing from the company? What if you need to fire some of your employees, and the one you feel closest to is the most logical target? How will you handle it if your friend asks you for a raise he or she doesn’t genuinely deserve? The hard decisions here will only get harder when friendship is added as a complicating factor.

Insubordination. A close personal friend may not feel the need to obey your every order. This person may feel as if he or she has his/her own authority. An incident of this type could disrupt your organization’s productivity and damage your perceived authority as a leader.

Sensitive personal information. Once you enter the world of entrepreneurship, you’ll probably be much more careful about what you post on social media. After all, those posts could become public, and anything embarrassing or questionable you post could come back to haunt you. That vulnerability also lies with your intimate friendships. For example, if an employee witnesses you acting intoxicated, or knows about a deep personal struggle you have, he or she could use it against you in the future or see you in a different light entirely.

Proximity. You might feel the urge to surround yourself with your favorite people, but it’s important to separate your social relationships from work. Being with employees eight hours a day at work, then spending extra recreational time with them on nights and weekends could make you grow resentful of one other rather quickly — even if these relationships are healthy ones.

The bottom line

So, is it a good idea to be friends with your employees? The straight answer is probably no.

Related: 3 Strategies for Managing Employee Relationships As Your Company Grows

There are some benefits to showing personal support and building true emotional bonds with your employees, but if you want to retain your authority as a leader and proactively mitigate certain complications, it’s better to separate your friendships from your work environment.