Starting a business venture is an exciting time, and choosing to do so with a friend can make business sense; after all, you both have the passion and skills that are needed to fuel the enterprise. However, it also leads your friendship down a path that neither of you anticipated when you developed your friendship, and if things do go sour, you both need to be prepared for your friendship to be challenged. Successful businesses have to overcome hurdles, disappointments and growing pains. To put things into perspective, consider how startup break up rates are between 20 and 30% greater than divorce rates! Here are 5 tips to remaining in business with your friend.
- Open dialog
You need to have the tough conversations early on in your working relationship. You need to have frank discussions about conversations that are usually avoided such as equity, salary, titles and job descriptions. If you find it hard to have these discussions, you may need to rethink who you are going into business with – they are the cornerstone of any successful partnership.
- Define your roles
Your co-founder will have skills and expertise that you do not, and that is what will make you a great team. You know the phrase too many cooks spoil the broth. You need to have clearly defined roles. Of course, collaboration is important for innovation, but you need to have clear boundaries as to who is responsible for the different parts of the business. Identify each other’s strengths and weaknesses, and use these to define the roles. Do not be afraid to enforce these boundaries.
- Know your priorities
People have different styles of working, and we all prioritize things differently. Some people need the security of routine, and others prefer working on a more relaxed and ad-hoc basis. You do not want to find yourself in the position of being frustrated by your partner’s different working style. They may prioritize being able to pick their children up from school over work commitments, for example, so make sure that you discuss what your partner’s priorities are.
- Prepare for all eventualities
You will spend a great deal of time working on a partnership agreement that confirms your positions within the company, but you must also dedicate time to an exit strategy. You do not know what the future holds, and you need to prepare for all eventualities. There may be an irreversible falling out, a critical illness or even a death, in which case you need to know how to move the business forward in these circumstances. Identify and research the options that are open to you; for example, a short-term loan from a company such as Betterfunds would provide you with the ability to buy out the business partner or help fund you if an accident occurs. Do not avoid having these conversations because you will pay the cost further down the line when you are facing these challenges under great stress or duress.
- Recognize your weaknesses
The very fact that you are friends means that you more than likely come from similar backgrounds and have similar viewpoints. This is great for friendships, but it can hamper your business. You need to recognize that you will also have similar blind spots, and to overcome this weakness, you need to hire people that will bring new perspectives and experiences into your business. A fresh pair of eyes is business gold.
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