Almost 20 years ago when I launched my first company Information Experts, I hired a friend as a writing subcontractor to design and develop a training curriculum for a big client. It really didn't occur to me that she would act unethically.

However, I wanted to set a precedent in my company that everyone was to be treated equally, so I required her to sign a non-compete and non-disclosure agreement.

It's a good thing I did that, because she violated both documents. She stole my proprietary content, and solicited work directly from my client. Again, I had to set a precedent with this situation.

Our attorney issued a cease-and-desist letter, demanding that she cease solicitation. My client broke ties with her, I fired her, and that was the end of the friendship. It was especially awkward because she was our neighbor.

Since then, I've worked with many friends, and I've watched my friends work with many friends.

With so many people starting businesses today (there are about 30 million entrepreneurs in the U.S. alone), it's only natural to reach out to our closest networks for support.

How do we protect our most important relationships while tapping into the strengths of those we love?

These 8 rules will help you to create buffers around potentially difficult or damaging situations, and ensure all parties feel valued and respected in their roles.

1: Establish clearly defined roles & responsibilities.

What is expected of each person? You would never hire a stranger without clearly defined roles & responsibilities. Clearly spell out what you expect of anyone you work with, and what they can expect of you. Assume nothing.

2: No exceptions to any rules: All restrictions/processes apply.

Per my personal example above, be consistent across the board regarding contractual matters. Everyone signs everything.

3: Respect financial arrangements.

The mixing of money and friendships, especially in business, is a potential landmine. Should you decide to work with a friend, do whatever is necessary to minimize financial friction. Stay away from loans and promisory notes. Pay your friend on time, in accordance with the agreed upon terms. Working with a friend is not permission to take financial advantage.

4: Respect the value and worth of each party.

I recently talked with two good friends that own businesses, who are experts in their fields. They feel disrespected, devalued, and taken for granted by friends they've worked with.

They both chose to charge their friends significantly discounted rates for their services. This is a terrible idea, and almost always backfires.

A true friend would not expect another friend to decrease her market rate, which is essentially communicating, "I don't think you are worth what you are charging others."

Conversely, the friend that discounts her rate ends up feeling as if she's giving away her services. "I felt bad" or "I felt guilty" is almost always the outcome.

5: Allow for an exit.

Every business arrangement requires an "out" clause, and this situation is no different. Discuss ahead of time the possibility that one may want to terminate the arrangement.

Should that occur, exit gracefully and graciously. Don't make it personal, and don't take it personally.

6: Respect confidentiality.

As with any business relationship, don't discuss your business with others. Don't share proprietary company information, don't discuss the relationship challenges, don't gossip.

Treat the business part of your relationship with utmost respect and confidentiality.

7: Have difficult conversations.

Difficult conversations are stressful. Especially when we blend our personal & professional lives, there is a lot at stake if a difficult conversation goes wrong.

However, not having the conversation is even worse. Trust that you can have a respectful, constructive dialog, and make it happen to move past any feelings of resentment or anger that may be building.

8: Nurture your friendship outside of the business.

To preserve the friendship, set aside time to just be friends. Grab lunch, go to a movie or a museum, or text/email/call with no business agenda - just to say hello.

A Note about mentorship, service donations, and trades

We all have much to contribute to others! Mentorship and pro-bono or discounted services are wonderful ways to help others move forward, especially when we can help socially impactful organizations fulfill their missions.

When we agree to mentor someone, or donate our services to a non-profit, we still must spell out the terms so that both parties know what to expect. The only thing missing is the exchange of money.

I have done many successful trades for service as well. Again, spell out all terms & conditions so that there are no surprises. These arrangements are still business relationships.

Good luck!