Question: A friend of mine from college and I have decided to start a business together. Any tips for making sure that our personal and professional relationships don't clash?
Question by: Samuel
A Strong Contract = A Strong Friendship
"Get your paperwork in order right away. You may feel like everything is sunshine and rainbows now, but if something happens down the line, you stand a much better chance of maintaining your relationship if you have documents you can refer to that will settle any issues that arise. In this case, being professional with each other will allow you to keep things casual and safe for both of you."
Spend Regular Time Apart
"Start up mode is intense; you're likely to be spending an inordinate amount of time together and it's inevitable that you'll clash sometimes. Scheduling and spending regular time apart, in different social circles will be refreshing and help ensure you both get the space you need from each other. "
Design the Relationship
"From the beginning decide how you are going to handle conflict. I have designed relationships with code words that allow both parties to stop what they are doing and listen to each without judgement. Some people need permission to say how they feel for fear of hurting the other party. If the agreement is there from the beginning it's much easier to clear the air."
Define Roles as Early As Possible
"It's extremely important that you understand what each of your responsibilities are, and respect them. If one person is the creative mastermind and the other person is the financial brains, go with that. Don't feel like you each have to be involved in every single decision in the process. You'll both go crazy and become less productive in the process."
Joint Ventures only work because of this one reason:
"Your skills compliment his skills and his skills complement yours. That's the only reason to go into business with a friend unless you're a seasoned entrepreneur. If you're just starting out, see which abilities you have that he doesn't and vice versa. Then focus on those as priorities and make SURE you get something in writing before you start bringing in any money. "
Choose Which Is More Valuable
"Before going into business together, you need to both be on the same page. Decide beforehand which relationship means more to the both of you. Is your personal relationship more important than the success of the business? If you disagree on this, don't move forward together. If you agree, proceed with caution. There is a reason people say "the only ship that doesn't sail is a partnership." "
Be prepared to lose the friendship
"Doing business with friends or family can get incredibly tricky. The number one rule of thumb is: be prepared to lose the friend before going into business with them. If you are ok with this, then proceed accordingly. People get "funny" about "money" and issues with your friend may arise that you never knew existed.Discuss your values about investing up front before your first deal together."
Prepare for the break up to avoid it
"People don't go marriage councilors to discuss happy times, they go to confront emotional conflicts. For obvious reasons, it makes most sense to discuss "potential" issues before they become real problems. Although it may sound pessimistic, stir the water before boarding the ship. Design the break up before something happens so you best understand each other and see if there is actually a fit."
If You've Never Disagreed, Don't Do This
"Every business and personal relationship will get strained at one point or another. If you haven't gotten into any serious disagreements about anything with this friend, you're not ready to go into business yet. It's the ability to passionately fight for what you believe in, lose the battle, and still remain friends that will allow you to be successful together."
Get a Written Agreement Immediately
"You've heard it over and over again, but it's true. Get everything in writing. They may be your best friend since kindergarden, but as soon as money rolls in and opinions clash it can get ugly. Sit down, discuss a partnership agreement and involve a lawyer. It will save you so many headaches down the road and keep your friendship intact. "
Don't let work issues leave the office
"If you two are arguing about something at work, don't let that issue leave the office. When the work day ends and you two grab drinks or dinner together afterwards, don't hold a grudge or let any tension seep into your friendship. Treat issues as work-related only and maintain your friendship out of work independent of what is going on at work that day."
Be Clear on the Vision
"In addition to having very clear legal agreements in place you need to be clear on the vision for the company. Too often partnerships and subsequently friendships fall apart because of disagreements in what the future of the company should look like. Have a clear strategy to achieve that vision and have a neutral person outside the company help facilitate."
Go left or right.
"Go one way or the other in terms of the kind of business you start. You can either make it a 9-5 kind of job and everything is compartmentalized and you know your roles and functions and when you are working, you are only working. Or decide to have more of a lifestyle business where you both love working so much, that your wealth creation together is just an extension of your personal life."
"Keep your opinions about your partner's personal life to yourself, even if you don't agree with something. Unless something is impacting the business in a negative way, it shouldn't be a topic of discussion between the two of you. You should also find someone else to be the friend who you talk to about personal things - don't try to make your business partner be all things. "
The Blind Side
"Plan excessively of how your respective skills will compliment each other and protect your "blind side". Experience has taught me that friends who have history and trust each other, but think differently can have great success by each providing for and looking out for the other."
Have a rule of absolutely no passive aggressiveness
"I went into business with my good friend as well, and one of the things that makes our team work is the fact that we are very honest with each other. In the moments when our emotions get to each other, or we don't like a decision the other has made, we immediately share feedback with one another. We then talk it out, then usually hug it out. Grudges will kill your friendship and business!"
Be head strong, self-reflective and honest
"When things get tough, it is very important to come together especially when there are disagreements. Business is based on (sometimes dueling) philosophies and it is a careful art to balance everyone's. Work on communicating clearly, directly and immediately on critical issues and everything should work out. "
Make sure you can argue
"If you haven't had an argument with your friend, it is probably a bad idea. Passive aggressive behavior can kill your business, and it can kill it quick. To run a business together, you both need to be able to express your opinions and concerns clearly. Running a business requires decisive action, you shouldn't have to be walking on egg shells over every issue."
Work on a project together before starting a business together
"Before you plunge into starting a business together, get some experience working together when there's relatively low stakes. For instance, maybe you could collaborate on a class project, co-chair an event or take on a single, time-limited contract. This gives you some real-world experience on how you work together before making the commitment to a jointly owned company. "
Understand Your Roles from the Beginning
"I have lost numerous friends due to businesses that have gone bad because one partner felt they were more valuable than the other because of the work they put in or their results. I strongly suggest you write on paper what each of your responsibilities will be and see who and negotiate what the value is. This must be communicated in the beginning and both of you must understand your roles."
Talk It Out
"Friends can be great partners, but these relationships can be filled with unexpected conflicts. Try to align interests as much as possible and spend as much time upfront as required talking through as many "what if" scenarios possible to gain comfort. This isn't foolproof, but thinking through issues before there is conflict may save you down the road. Final, define roles and set expectations."
Mix Personal and Professional Early
"Sure it would be nice to have a separate personal and professional relationship, but for startups that is not possible. A startup is all-encompassing so be prepared to have personal and professional mix. Know this in the beginning and don't set up fake boundaries in the start that will be unsustainable as the business grows. If you need these boundaries, you may want to rethink the partnership."
In Business, Do Opposites Attract?
"Don't just link up with your chummiest mate. For a strong business partnership to flourish and last, you need likeminded attitudes and complementary skill sets. Those are the requisite requirements you must look for, not wingman, drinking buddy, and frat mate. "
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to unemployment and underemployment and provides entrepreneurs with access to tools, mentorship, and resources that support each stage of their business’s development and growth.