Starting a business with a friend requires a certain level of bravery. It also needs a plan. Surprisingly, people tend to start a business with friends and family very often. I mean, what is a better way to do business than to confront issues together? While this might sound fun and truly promising, you might be in for a rude awakening.
Let me just put it out there. Starting a business is relative to each person. The results can be different. However, over time, there are some things you need to sort out when it has to do with family and friends.
What to Expect When Starting a Business with a Friend
I’m going to start with the good. It’s going to come really naturally to you. In the beginning, you’re going to feel like you can take on the world together. Things will work out just fine as your mutual friends will probably also support your business.
If you are someone who really wants harmony with their business partner, then this will sound really appealing to you.
It’s your friend. You are going to find it hard to make them feel accountable to you. That’s the problem with friends and business. Starting a business with a friend can dramatically change a friendship if not handled properly.
This is one of the problems with friends and businesses.
Favoritism and Bias
You are going to face a lot of problems with this one. The problem here is most people expect a pass at anything if they are friends with you. This quickly leads to them doing things that they probably wouldn’t do if they were in business with a stranger.
If you are going to start a business with a friend, you are going to have to deal with favoritism and certain expectations. This also comes into play when dealing with a family member.
These expectations can easily make a business fall apart.
How to Make Business with a Friend Work
Agreements in Partnerships
So here’s what you need to do. Make sure you make some early agreements that everyone should abide with. It shouldn’t be an oral agreement. Try to pen it down as soon as you can. Make sure it’s crystal clear. This will be necessary for a situation where your worst fears come to play.
Agreements in a partnership will also cover money issues as well as dissolution problems. The clearer it is, the more likely your relationship is going to survive a crash in the business.
Have the Toughest Discussions at the Beginning
While working with friends can seem fun, it can easily become filled with complacency. So have those tough conversations at the beginning. Make sure everyone is clear about their duties and the consequences of not living up to them.
This removes the possibility of them playing the victim card when things unravel. As always, make sure everything you discussed is written down and both parties have a copy of the agreement.
Start a Business with a Friend That Matches Your Goals
Most people start businesses with people they like. That’s totally wrong. Instead, you should start a business with friends that match your targets. If you want to take your business to higher levels, don’t start a business with someone comfortable with average.
The end result is a lot of frustration on both ends of the table. That’s not the best way to progress in my opinion.
If you are not sure of what your friend brings to the table, then don’t go into business with them. It never ends well.
However, if your friend understands what business is all about and is willing to put in the right efforts, the sky is just the beginning.