It’s not unusual for business ideas to spring out of a brainstorming session between friends. If you’re both entrepreneurially minded and come up with a concept that really seems to fly, there’s no reason why you can’t pursue it. Apple, Google and Microsoft are all great examples of world-leading enterprises that sprang from collaborations between friends.
However, it’s important to be aware of some of the pitfalls – as well as the pleasures – of kickstarting a business with a friend. Shifting your relationship to a business footing will naturally change the way you interact – and rightly so. You’ll need to make sure that your business is run along professional lines and that both partners understand their roles and responsibilities. This is even more important if you’re leading a team of employees.
We’ve considered some important do’s and don’ts if you want your partnership – and friendship – to go the distance:
Communicate With Each Other (a Lot)
In many ways, good communication is the key to every productive relationship – personal and professional. Problems can arise when friends go into business assuming they have the same goals, aspirations and work ethic. But what if office hours mean 8 am-6 pm for one partner and 10 am-4 pm for the other? Incorrect assumptions can be the death knell of any partnership, especially if you let resentments settle and fester. If you can talk everything out in the early stages, including expectations of working hours, investment capital and the division of duties – even those things you think are implicitly understood – the better your chance of being on the same page. Keep talking and sharing ideas, doubts and plans.
Clarify Roles From the Get-Go
This is a natural extension of good communication. If you clearly define your roles and responsibilities at the outset, you’ll lay the foundations for a long-term working relationship that respects the input of each partner. The temptation is to muddle along ‘co-owning’ all the aspects of your operation, duplicating effort and getting under each other’s feet. Not only does it risk causing confusion but is also likely to undermine individual efforts along the way. By logically splitting duties – maybe one partner is responsible for marketing, while another deals with suppliers – each can take responsibility and fix things that go wrong. Which doesn’t mean that you can’t take joint decisions on big issues!
Create a Business Plan
Mapping out your business future is essential for any business – even more so when friends are taking an important step together. It’s another way of nixing assumptions and setting out goals and expectations clearly and concisely. It means you can cut through the excitement of starting your venture – and all the promise that holds – and make sure there’s a really firm strategy in place to support your dream into becoming a real and practical vision of the months and years to come. Pulling a business plan together will also force you to have, sometimes uncomfortable, discussions about the things that could go wrong and establish a plan to fall back on in case you hit a rough patch – or when one or both of you wants to call it a day.
Don’t Rely on Goodwill
Sometimes people are tempted to go into business together simply because they have a lot in common. But compatibility between friends doesn’t always result in a smooth transition to becoming business partners. Above all, you need to start the right business with the right partner – you both need to have similar goals and aspirations and the ability to communicate productively even under pressure. Consider the personal and professional qualities of your would-be partner in the same way you would if they weren’t your friend. Don’t overlook their flaws and think about how their personality traits might play out in a business situation. Remember that extricating yourself from a business partnership that has soured can feel a bit like a divorce, so do your due diligence upfront.
Keep Your Personal and Professional Lives Separate
While running a business with your best friend may seem like the perfect fit, you do need to separate your personal and professional lives. Holding ‘frank’ business discussion may be tricky if you’re constantly on your best behaviour for fear of upsetting your friend, though, so it’s important to establish guidelines at the outset. One tip is to confine business discussions to office hours, minuting your discussions where possible to avoid misunderstandings. A brief start-of-the-week meeting with a list of actions and decisions can help to keep everything on track but ensure any niggles are quickly addressed to avoid resentment setting in.
Allocate Time to Nurturing Your Friendship
If you don’t want to sacrifice your friendship on the altar of business, you’ll need to work at it. It sounds contradictory but the best thing you can do is to go into your business partnership with a fully thought-out exit plan if it all collapses, so you know that even if your business fails, your friendship can survive. This means considering all the things that could go wrong and planning a response – what if one of you decides the business is no longer making them happy? What if illness intervenes? What if either of you needs a sabbatical? Make time in your schedules to do some bonding.
Are You Ready?
Friends who are considering entering into a business relationship should think about it as the professional equivalent of a marriage. You need trust, respect and good communication to make it work, as you’ll doubtless experience your share of highs and lows. This is why you need to know you can handle the difficult times as well as enjoying the fun stuff. You might even end up spending more time with your business partner than you do with your life partner, so you have to be doubly sure that you can sustain a productive relationship over the long term. Just as marriages are built on more than mutual affection, so successful business relationships need firm foundations. If you think you have what it takes – through thick and thin – you could be ready to embark on your next entrepreneurial adventure!