Starting a business with friends can be a risky affair. If you do not manage it right, you could end up losing your friendship forever.
There are many articles guiding employees and entrepreneurs on building effective and strategic business partnerships with strangers at work. Nonetheless, you will not find as many resources on how to build an effective business partnership with friends. While some people advocate beginning a business venture with friends, others believe it to be a sure-shot recipe for disaster. We will not be preaching for any side here, but we will let you figure it out. Here’s a lowdown of the good, the bad, and the ugly of starting a business with friends:
- You have a person you can share your work worries with – Starting a new business can be stressful, and not everybody wants to lend an ear to your stresses at work. When you go into business with friends, they, too, are subjected to the same stresses and will feel more inclined to listen to your professional concerns and discuss theirs with you. Having that emotional support is crucial because running a business always takes it toll. It will motivate you to keep going.
- You are already aware of each other‘s strengths and weaknesses – As friends, you know what gets the other fired up and inspired and which topics to avoid in conversation. Such an equation helps as you can leave the bond-building exercises and get to work where it matters right away!
- You are inclined to be soft on the other – Even though you may have grievances against each other on the work front, you feel inclined to let these slide since you do not want to hurt your friend’s feelings. It is never advisable to take such an approach; it will harm your business more than you could imagine especially where they do something wrong that impacts the business.
- You move in the same network – Sharing the same circle of acquaintances can be detrimental for partners starting a new business. When you partner with a stranger, you gain access to their pool of acquaintances and a wider audience base to promote brand awareness. This may not be the case when you partner with a friend .
- The stress you experience is so much more – When starting a business with friends, it may be possible that it does not perform the way you had expected. In this case, stress levels will go high, and the resulting tension is not easy to dissipate. As friends, you have the tendency to go easy on each other and may allow for slips that can cost your company. When you realise the company is failing, all these excuses come back as resentments and affect the company’s health and your friendship.
- Making decisions can be tough and take time – In any relationship whether business or personal there is always one person who is more dominate and gets their way or decision. In business its more difficult for this to be balanced because one person usually has more control over different departments, has put in more of their own money, spends more time working on the business, or has more business and career experience. This friend can quickly become the leader and sole decision maker for the business and employees, making decisions on their own without consulting you. When this happens it will cause anger and hate in your friendship especially if you feel you’re not being heard. Make sure when starting the business you clearly separate who makes the final decision and has final control over which parts of the business.
Now that you know the pros and cons of starting a business with friends, you can make your call about whether doing so is worth it. After all, you and your friend will be the ones ultimately responsible for the company’s success or failure.