To Start a business with a friend can always be like the best option. But don’t conclude yet, read this post to know how.
Friends are people who are easier and faster to do business with. Billions dollar businesses have been built by Entrepreneurs who teamed up with their childhood friends and then went on to create grown-up versions of their lemonade stands.
But many entrepreneurs that start a business with a friend wind up with broken finance and ruined friendships. It doesn’t take, taking online business courses or reading through many business books to see that common trend.
And still must of the time starting a business with a Friend, can also end up being a relationship that’s harder and more expensive to get out than marriage.
Though as I said in our previous post, am not a big believer of having too people start a business. I believe in having one person run a business with is creativity, and resources. And having others bring their skills and expertise together to achieve a goal.
If fact, if you want to hedge your Business decisions on the wisdom of statistics alone. Stoically ignoring your friends frantic excitement about “this cool business idea” seems to be the safest route. If you’re still looking for that right business opportunity.
But there are very different perspectives on this, some swear they’ll never start business with friends and family, other’s believe it’s the only way to invest.
Yet, it’s possible to build a highly successful business either way. I’ve had a variety of partnership experience with different people. Some have fallen away; others has been okay for a while, then, there are those that have really been amazing.
Should you start business with a friend?
Many business start-up by friends, has been relatively successful right away, but they always end up not talking to each other and often sell the company much sooner than planned with shattered hopes, and hurt feelings.
If you want to become a Successful entrepreneur, you often have to beat the odds and embraces learning experiences. Disguised as failure along the way. Because partnershiping with a friend, You have to risk failure and friendship, in other to get your business off the ground.
But, over the years there are some founding partners that has build some prominent brand. Certainly, life wasn’t always a joy ride. For those founding partners varying tastes, priorities, and approaches often lead to conflict.
- Hawlett-packard. With bill Hewlett and Dave Packard.
- Bens&jerry’s. With Ben Cohen and jerry Greenfield.
- Apple. With Steve’s Wozniak and jobs.
- Microsolf. With bill gates and Paul Allen.
- Google. With Larry page and sergey brin.
However, if you want to become a successful entrepreneur, you often have to beat the odds, and embrace learning experiences disguisesesed as failure along the way. Going against the flow is a behavioral trait hard-wired into entrepreneurial DNA. If you’re too risk-averse, then you’re likely not ready to launch a business yet anyway.
Setting friendship base business up for success.
You have to be very objective when starting a business with with a friend, the failure rate out there is just too high to ignore it.
You’ll be best protecting your friendship for the long term if you set up the partnership in a truly businesslike way from day one. The same goes for partnering with family, too. Avoid awkwardness at family function in the event things go by setting up the business relationship in a professional manner.
And if you are raising money. Savvy investors will want to know you have all your bases covered so that they are covered, as well. Begin by setting very specific boundaries, roles, and expectations. So willing to have tough conversations up front. Map out what will happen if you decide to go your separate ways later or if one partner gets hit by a bus.
Put it in writing, then there shouldn’t be any arguments (but there’s always the possibility).
Questions to ask yourself before starting a business with a friend.
1. Which specific role and responsibilities we each of us assume?
If you are a strong marketer that want to focus on reaching and building with customers, and your friend(partner) want to do the same. You might have a problem. Clearly define your complementary roles, and make then engage your interest’s.
2. Did our goals align?
Nothing can be more winning than two business partners with the same well writing goal. It’d be a red flag if one of you wanted to build a lifestyle business that could last decades. And the other had the goal of creating a high-growth business that could be acquired within a year or two. These fundamental differences in growth strategies could lead to conflict.
3. Do will share the same value?
If you have drastically different values, think twice about mixing business with your friendship. Because if one is driving primarily by making money, while the other derives more energy from quietly plugging away and the accomplishment of regularly shipping new products, that’s pretty large fundamental difference.
4. Is you and your partner both equally committed to the project?
Commitment doesn’t necessarily mean putting in crazy hour’s and spending nights culled under the desk in the office. One of the partners may have the skills to handle the workload while the other can contribute financially to keep the show running. Before you commit all your time and energy to the project. Be absolutely sure that your friend is ready to do the same.
Never forget to put everything written, when starting a business your friend.
It may seem too formal to put paperwork around your friendship. After all, you’ve done fine so far and have solved conflicts through mediation rather than legal means. But when money and leadership are at stake, people behave in unexpected ways.
Remember; every marriage starts out sunny and happy, but when it gets to a divorce. The gloves comes off. It’s the same with a business partnership! It starts out great, but it might not stay that way for ever. The paperwork will protect you both. Should things get wobbly.
Prepare an exist strategy.
To some having a plan B, is like planning to fail before getting started. Like I have previous written on this blog, That the best guard against failure is to plan for failure. That’s the best way not to fail is to plan for failure.
But the truth still remains, contingency plan can help preserve your friendship. Or at least let’s you breakups in a civilized manner.