How do you transform social friends into business friends? Very carefully! But here's the reality. Business changes existing friendships. If you become friends with your client, that's one thing. It's completely different if you have the friendship first.
Many years ago, a friend of mine who operates a web development company wanted to do all of my web and printing work. I was thrilled to give him the business. The work was good and projects were completed on time. But every week I started receiving invoices for minor requests I had made. And the charges were excessive. His business was having serious financial problems, and his invoices became more excessive. It put me in the uncomfortable position of addressing the situation, which ultimately ended the friendship.
These things don't happen often but they do happen. I'm usually easy to work with (no really!) and want nothing more than to help my friends succeed. But when issues present themselves, it becomes awkward. The business issue becomes personal. Of course, some business friendships do work. I'm just saying you have to be careful.
Finding the right business
What does this have to do with you as a financial advisor? Everything! As an advisor, agent, broker, rep, or planner, your inclination is to do business with everyone. Friends, family, countrymen! Who are you to be picky? But in your role as an advisor, you are privy to important (and often personal) information, and risk is involved. This can make clients uneasy when things aren't going well – especially those that have been your friends. And then there's the awkward conversation that follows.