Should Your Friend Be Your Business Partner?
A common practice when starting a business is to find a business partner. Many people choose to work with friends and family members. Maybe both individuals came up with the business concept, or they have the skills in areas one falls short. But is it a good idea to choose someone close to you for your business partner? Yes and no. Thinking about the advantages and disadvantages, and approaching them right away will help you gain success and avoid problems in the future.
You may want to do a “trial run” by working with that person on a smaller basis first, such as collaborating on a small project to see how well you work together. An important advantage, however, is that you have a shared financial responsibility. You can split the profits and the operating costs. You have a mutual trust and you know you can count on them for motivation and support. The will probably be willing to pick up the slack if a challenging situation inhibits your ability to work for awhile. They can offer complimentary skills to yours—you might be the creative, innovative type while the other person excels at balancing finances and organizing things. Sometimes, you can get so involved with the business that you are overworking yourself and if you are, chances are your partner is, too. When one person sees that happening, the other can speak up when a break or reevaluation is needed.
Some disadvantages may seem obvious, but in the excitement of starting a new business venture together, most people don’t consider them. Even though you socialize well together, your work habits and business ethics may be totally different. A partner may expect that the two of you receive equal pay, but this may become an issue if one person ends up doing less work. When the two of you disagree on a business matter, it may hurt or even end your friendship. For example, if one person makes a business contact that the other isn’t interested in, they may pursue them anyway—creating a divided, “2-business-in-1” atmosphere. Responsibility is also somewhat ambiguous: If they don’t show up for two days or make a failing advertising decision, you will both have to make up the difference.
With all that in mind, you can take steps to make sure you choose the right partner (or decide to work alone) before you even begin. Find out if you have the same vision and ideas for running the business. Make sure you know the best ways to communicate with them and agree not to micromanage the other person’s work. You want to work with someone who listens to you, doesn’t criticize you, and offers as well as accepts advice. Be sure to assign the roles that best fit your personalities and strengths. Have your ownership agreements in writing as well as exit strategies just in case.. Having the same views on other things (religion, politics, etc) may not be necessary, but beneficial. Keep in mind that negative changes in one’s personal life have been known to threaten or disintegrate a business. Finally, if you decide not to work with a friend, you can find another partner through listserv groups, referrals, contacts you meet at events, and through online research of websites. You can also consider a limited partner or investor to give you more control with some financial support.
When the planning is done realistically, working with a friend can be a rewarding and worthwhile experience.