Business With A Friend: Is It Ever A Good Idea?
“Never go into business with friends”. That’s how the old axiom goes. However, most people don’t believe in absolutes, and they are not always applicable. There’s no doubt that there is added risk to your personal life when it comes to inviting a friend into your side-hustle, but you can manage those risks.
Do you trust them?
This is a tricky question. You might trust your friend to look after your pet while you’re on vacation or to stick up for you in an argument. But that’s not the same as trusting them with your business. Regardless of who it is, it’s worth considering using tools like a background check service which is offered by Checkthem and others. Your friend may not have told you about past bankruptcies, legal cases, or other career failings. Especially if they’re a friend you’ve only met in the past few years. There is nothing wrong with taking the extra step to ensure you can trust a potential business partner.
Can you separate business from personal?
Being willing to do a little further digging is all part of separating the business and the personal. You have to be able to set clear boundaries between what is friendship and what is the business partnership. For instance, you need to have a partnership agreement drafted by an attorney, there’s no negotiating on that. These agreements are crucial to setting plans for the business that can’t be altered just because a disagreement arises later. What’s more, it protects the business, meaning that who has control is set in stone, and if one partner is forced to drop out or passes away, the business doesn’t have to dissolve.
Do you have the same goals?
What do you both want from the business? Where do you see it in five years? What kind of audience do you want to attract and what kind of brand do you want to build? You need to have the same big strategic goals even if you won’t always agree on the nuts and bolts of how to get there. The best way to figure out that’s the case is by drafting up business goals in advance, using pages like this goal-setting guide by Dummies. If you can’t agree on the big picture, then you are more likely to conflict with each other way too often.
Willing to work on it?
There will be conflict and disagreements. That’s the nature of the business. Your differing skill sets might lead to differing perspectives. Disagreeing with your friend isn’t the end of the world. But you shouldn’t handwave it, either. Be willing to work on your partnership. Ensure you can give them the respect and attention they deserve and they can give you the same thing.
Above all else, frank, upfront discussion about plans, about risk management, and about the nature of your relationship is necessary. The friendship is going to change if you go into business together, there’s no doubt about that. It can break down completely, or it can be strengthened. Just don’t go into it with rose-tinted glasses.