Starting a business can be very rewarding, especially when doing it with friends. Your friendship can be an asset but it can also be an obstacle. A friendship and a business relationship are very different and you need to be aware of this. As long as you consider the risks and plan intelligently, you can be successful.
Define your roles early on
When working with friends, a collaborative approach may seem appropriate. The problem is that this only works up to a point. When getting things off the ground, you may want to put every single thing to a vote but this can waste a significant amount of time. If you get too bogged down in all the bureaucracy, it will be very hard to accomplish anything.
It is better to understand the strengths and weaknesses of each person and define their individual responsibilities accordingly. For example, when looking for an office for new business, it would be better to allocate this task to someone familiar with real estate. Offices.net offers fully equipped, turn-key small office rentals.
Being very clear from day one about each person’s responsibilities can help to prevent conflict and make sure everyone is clear about what is expected of them from the outset. If something goes wrong, that person has to take responsibility and fix it.
Write a formal business plan
Being friends and writing a formal business plan are not mutually exclusive. One of the keys to business success with friends as business partners is having everything in writing. A business plan gives you a point of reference if there is any confusion.
Sitting down to write out a business plan helps you to find out if you are on the same page about your visions and goals for the business. It is a good idea to meet with a lawyer who specializes in partnerships. You may not have thought of certain contingencies, such as one partner wanting out of business.
Be clear about the time commitment
Even if you and your friends have shared values and tastes, this does not necessarily mean that your work habits will align. Conflict is sure to arise if some end up putting in the lion’s share of the work because the others do not fully understand the type of commitment that’s required to start a business.
This can lead to resentment and jeopardize the relationship. Everyone needs to have the right expectations about how much time they will need to invest.
Don’t avoid the hard conversations
Open communication and honesty are crucial to ensure everyone is on the same page. You may assume you’re on the same page just because you’re friends but this may not be the case. Some subjects are harder for friends to talk about than others.
For instance, talking about titles, salaries and job descriptions, titles etc. could be difficult. Even though you trust your friends, you still need to communicate about everything, especially the difficult subjects.
Make sure you’re compatible as business partners
Friends do not always agree. Emotions can run high and they need to be managed to run a business successfully. A friend’s tendency to turn up late for lunch may be annoying but when she turns up late for an important business meeting, it could cost your business a client.
If you and your friends have disagreements that turn into huge fights and no-one is prepared to compromise, you should probably not go into business together. You need to be able to keep your egos in check and be prepared to compromise to be successful.