Are you considering starting a business with a friend? Want to ensure that your partnership, and friendship, will stand the test of time? These tips will help you figure out if it’s a good idea to start a business with your friend, and if so, what steps you should take to sustain the relationship.
1. Should your friend be your business partner?
The first thing you should ask yourself is if you really need a business partner. Business partners should only be taken on if they are instrumental to the venture, i.e., they should have financial resources, sought after skills, or connections you lack. Otherwise, it might be better to have your friend as an employee or freelancer.
2. If you’ve never had an argument, don’t do this
Starting a business requires passionate debates about what you believe in and then being able to get over the fight and move on. If you can’t do this as friends, then it might not be a good idea to go into business together.
3. That being said, if your friend is a good mediator, that’ll make all those arguments easier.
Having someone who can hear both sides of an argument, put feelings away, and make the best decision is a pivotal part of any partnership.
4. Clarify your roles before you get started
Ideally, each of you has complementary skills. Maybe one is the creative marketing type and the other is the obsessive business person. Figure out how you balance each other and clarify what each person will do.
5. Discuss how you are going to communicate in a healthy manner
As we mentioned before, you will inevitably get into arguments. Planning for this, like every other aspect of your business, is key. Think about how you are going to give each other feedback, what will be the timing and structure of regular meetings, and what your pet peeves are.
6. Get everything down in writing
Now that you’ve discussed the main points of your partnership at length and have agreed that you want to pursue this business together, get everything down in writing: immediately. Just because they’re your friend doesn’t mean you should approach starting a business differently from how you would conduct yourself with a stranger: Prepare for every circumstance in advance so there’s no question about how difficult situations will be handled. This will save many headaches and lawyer fees.
Every business agreement should discuss three essential areas: compensation, exit clauses, and roles and responsibilities. The financial details are particularly important: detail where the money is coming from, who owns what percentage of the company, who is investing how much, and when and how each partner will be paid.
7. Also map your vision in writing
Here, you should discuss and clarify each person’s needs and expectations, and agree upon your vision for the company. This is also a time to talk about communication needs, such as expectations around responding to emails and phone calls and decision-making styles, and business growth projections.
8. Once you start working together
It’s wise to have other people join the company quickly. This way, they can keep you in check and make the business feel more like a business than a group of buddies hanging out. You’ll just need to make a concerted effort to make them feel part of the team.
It’s also important to spend regular time apart in different social circles: This will be crucial to maintaining your friendship and business.
Have you ever started a business with a friend? What tips would you like to add? Share your advice with us in the comments below.
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