There’s that grand allure of entrepreneurship – charting your own course, chasing your dreams, and potentially sailing into the sunset of success. There are five key questions to ask yourself if you want to go solo or not. But what happens when you decide to start a business with friends?
It could be an exciting prospect, don’t get me wrong. It’s filled with the promise of shared values, visions, and camaraderie. However, like any adventure, starting a business with friends comes with its own set of challenges and pitfalls.
I’ve done it in the past, and I’m here to share with you and guide you through the do’s and don’ts of navigating this entrepreneurial journey with your pals.
The Do’s
Communicate Openly and Honestly
Communication is the cornerstone of any successful partnership, and it’s doubly important when starting a business with friends. You’ve got to learn to become transparent about your expectations, goals, and concerns from the get-go. It’s necessary to foster an environment where everyone feels comfortable expressing their thoughts and ideas.
I learned from experience that you can schedule regular check-ins or team meetings to discuss progress, challenges, and any issues that may arise. Remember that open communication lays the foundation for a strong and resilient partnership. There are also communication tools that can help you navigate this particular action better.
Define Roles and Responsibilities
It’s vital to be very clear when it comes to defining roles and responsibilities within the business. Don’t forget to clearly outline each person’s role, their areas of expertise, and the expectations associated with their position. This helps prevent confusion and ensures that everyone is on the same page. And this is something you need to aim for from the beginning.
If one friend has a background in finance, designate them as the finance lead. If another friend excels in marketing, entrust them with marketing management responsibilities. Clear delineation of roles minimizes friction and maximizes efficiency.
Set Boundaries and Establish Ground Rules
This is something I wish we focused on more when I built a business with a friend. While it can get tempting to blur the lines between work and friendship, it’s essential to set boundaries and establish those ground rules from the outset.
My take is: agree on a process for making major decisions, such as consensus-based voting or assigning decision-making authority to specific individuals for different areas of the business. This way, you get to ensure that everyone is on the same page, and it reduces the risk of any kind of misunderstanding.
Celebrate Success and Milestones
Building a business with friends is an adventure worth celebrating. Take the time to acknowledge and celebrate success, no matter how small. This will have a strong impact on team morale. Whether it’s hitting a sales milestone, securing a new client, or launching a new product, celebrate these achievements together.
In the past, I’ve been able to host a team dinner, plan a weekend getaway, or simply raise a toast to commemorate milestones and achievements. The more you get to appreciate and the celebrate, the more you are able to strengthen bonds, boost morale, and reinforce a sense of camaraderie.
Read: Business and Friendships: Strategies for Mixing the Two
The Don’ts
1. Don’t Neglect Legal Formalities
Let’s be real. While it’s easy to get swept up in the excitement of launching a business with friends, don’t overlook the importance of legal formalities. If you want to really make this partnership work, you’ll consider this. Ensure that you have a clear and comprehensive partnership agreement in place that outlines ownership stakes, decision-making processes, and dispute resolution mechanisms.
Consult with a legal professional to draft a partnership agreement that addresses potential scenarios, such as what happens if one partner decides to leave the business or if there’s a disagreement about the direction of the company. These things happen, they’re normal, so protecting yourself legally safeguards both your friendship and your business.
2. Don’t avoid Difficult Conversations
No matter the business you have, conflict is inevitable in any partnership. But avoiding difficult conversations only exacerbates issues. I’ve seen it unfold firsthand so it’s something I’m truly trying to advocate for. Don’t sweep problems under the rug or tiptoe around sensitive topics. My advice: address conflicts head-on with honesty, empathy, and a willingness to listen and compromise. That’s the only way it will work.
If you notice a friend slacking off or not pulling their weight, address the issue promptly and directly. If a friend wants to join the business but whose lifestyle and values do not align with yours, learn to say no. Approach the conversation with curiosity rather than with judgment and seek to understand the root cause of the problem before brainstorming potential solutions.
3. Don’t Let Emotions Cloud Judgment
Remember, we’re only humans and tend to let emotions take the best of us. Starting a business with friends can blur the lines between personal and professional relationships, but it’s essential to keep emotions in check when making business decisions. Don’t let personal feelings or biases cloud your judgment or influence important business decisions.
If you’re considering hiring a friend for a critical role in the business, evaluate their qualifications objectively and consider whether they’re the best fit for the position based on their skills and experience. Making decisions based on merit rather than personal relationships ensures the long-term success of the business.
Read:How to Protect Yourself When Going into Business With Friends
4. Don’t Sacrifice Work-Life Balance
While building a business requires dedication and hard work, don’t sacrifice your work-life balance or neglect your personal relationships in the process. Striking a healthy balance between work and leisure is essential for maintaining your physical and mental well-being and sustaining long-term success.
Schedule regular downtime to recharge and unwind, whether it’s spending time with family and friends, pursuing hobbies, or simply taking a walk in nature. Prioritizing self-care and maintaining a healthy work-life balance ensures that you can bring your best self to your business endeavors.
Conclusion
So, that’s the scoop on building a business with friends. It’s a wild ride full of ups and downs, but the rewards can be amazing. Remember, clear communication is your lifeline, defined roles keep things smooth, and a bunch load of enthusiasm is the fuel that will keep you going. But the secret sauce could be your friendship. It’s the magic ingredient that can weather any storm and make the journey just as incredible as the destination.
Also Read:
How to Ask Friends to Support Your Business
How to Ask Friends or Family to Invest in Your Business
18 Businesses You Can Start with Friends
Victoria is a freelance writer, obsessed with finding new insights. She
writes about event management, smart cities, technology, healthy
mindsets, and well-being. Her main mission is to connect the dots and
craft word packages for interesting ideas. She writes to inspire and
empower people. She has also written for The Huffington Post and Engaget.
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