In today’s competitive business landscape, going into business with friends can give you an advantage. Having strong partnerships can make all the difference. For some, that partnership is built on years of friendship, trust and mutual understanding. Success stories of partnerships that come from friendship exist. However, there are also countless cautionary tales of friendships ending in bitter disputes.
How does one successfully run a business with friends? Six entrepreneurs share their insights and the lessons learned from their experiences.
Should I go into business with a friend?
Starting a business isn’t an easy endeavor, so the thought of partnering up with your favorite person can seem like a great way to mitigate some of that stress and make it more fun. That can certainly be the case, and it can absolutely be done, but there are some best practices you need to keep in mind.
When going into business with a friend, it’s important to take into account that your relationship changes. Communication often needs to become more formal (at least during working hours or when working with other employees), emotions need to be kept in check to keep your business running professionally, and close personal connections need to have appropriate boundaries to prevent sloppy business practices.
5 tips for how to go into business with a friend
There’s a long list of do’s and don’ts if you’re going into business with a friend. Keep these tips from successful entrepreneurs who’ve done it in your back pocket.
1. Know when it’s time to bring in a business partner
Jeriel Sydney, co-owner of FABLERUNE, came home from a European vacation with a dream of starting a business to sell small-batch skincare. She pursued this dream and began building her clientele, with her friend Bobbie Cunningham often stopping by to help out. As the business grew, so did the assistance that Cunningham offered. It wasn’t long before Sydney recognized the potential for a partnership with Cunningham.
“I felt so overwhelmed, and Bobbie has always calmed me down, so for me, the idea of having her come on board felt like a life raft at the time,” Sydney says. “There were big steps that needed to be made, and I couldn’t make them all by myself.”
2. Acknowledge each other’s strengths and weaknesses
When considering a friend as a business partner, it’s essential to evaluate their strengths and weaknesses. Artem Mashkov, CFO of SwagUp, and his friends identified their individual strengths and weaknesses, which helped them create a successful partnership.
“You know where their pitfalls are, you know what the gaps are, you know what to avoid, you know how to kind of balance each other out,” Mashkov says. Describing his partners, he notes that “Michael [Martocci] is very forward-looking. I’m very risk-averse. And Helen [Rankin], she’s very good at execution and getting her hands dirty and going in and digging up the problems.”
When Cunningham joined Sydney at FABLERUNE, their differences were what made things work. “We saw things in each other that we didn’t have in ourselves to make this business what it is,” Cunningham explains. However, it did take time for them to settle into their individual roles.
“We thought we were supposed to do everything, and we ended up stepping on each other’s toes,” Sydney says. As their business grew, they learned to increase efficiency and validate each other by utilizing their own individual strengths.
Jade Schwarting and Lisa Mullen, co-founders of the PR company dble collective, worked together for years before starting their business. Because of their history of professional collaboration, Schwarting says that their roles felt intuitive: “I always felt Lisa and I knew without having to say it: what our roles were, how we could contribute, how we needed to participate, how we needed to show up.”
Throughout the process of dividing responsibilities and roles, communication is key, Mullen adds. “I think openly acknowledging each other’s strengths and weaknesses and feeling comfortable talking through solutions—whether it’s collaborating, bringing on additional support or reallocating responsibility—these have been really helpful practices for our business,” she says.
3. Navigate difficult conversations in a business partnership with friends
Clear communication is critical in any partnership, but it is even more crucial when working with a friend. Schwarting emphasizes the importance of addressing concerns and frustrations head-on to prevent misunderstandings and ensure smooth business operations. “Being a direct communicator is really helpful, especially if your business is quite literally, for the most part, two people,” she says.
A company vision is an important aspect of any business. Sydney believes that being open about these conversations makes things easier. “For anybody who started a business, there’s a bit of anxiety that your vision won’t be seen or respected, or you’ll lose part of the identity,” Sydney says. “Those fears come up a lot still, but we do definitely talk about it, and we both make sure our vision is being seen.”
Sydney also highlights the importance of managing emotions while running a business, as you’ve invested too much into it to let an emotional outburst be its downfall. “Something Bobbie taught me was if there’s a problem, just immediately air it out. We don’t have time to sit in it. It’s better to just deal with it quickly, and then our feelings don’t get as big,” Sydney explains.
When it’s time to navigate feelings that start to feel big, Cunningham suggests going on walks to discuss important matters. “We go on a lot of walks to talk out important things. I think the movement helps us not be so nervous to have difficult discussions. And also, we don’t have a lot of personal, private space in our warehouse. But those walks are where we really hash out when we’re getting on each other’s nerves or when there’s something going on in the business that we have to figure out,” Cunningham says.
For Mashkov, having a foundation of friendship is helpful. He knows that at the end of the day, his partners mean well. He believes that one of the benefits of working with friends is trust in their intentions, as the business relationship is built on a personal connection. “We have conflicts and disagreements, and we resolve them through merit-based and data-based arguments. And that’s been very successful,” Mashkov says.
4. Establish clear boundaries for a healthy balance
Maintaining a healthy work-life balance may be challenging when your business partner is also your friend. Letting work and life bleed into each other is inevitable. Though it may also make it difficult to unplug from work completely.
Schwarting says that one of the aspects she and Mullen are working on is creating clear boundaries and work hours.
“Having clear designations of when phone calls and texts are related to work and when it’s time to talk as two friends [is important],” Schwarting says. “And being clear about what hours you like to work within. And making sure that I’m trying my best to communicate to Lisa only within those hours about work and anything outside of that is our friendship-related stuff.”
This approach allows them to switch off from work and focus on their friendship. Mashkov, who has experienced successful and unsuccessful ventures with friends, agrees that it’s important to distinguish work and personal times.
“Keep it 100% separate,” he says. “When you’re out as friends, just hang out as friends. Don’t talk business. It’s very hard to stop yourself from doing that, but when you’re in business mode, it’s all business mode. When you’re in friend mode, it’s all friend mode, and just don’t mix those two.”
5. Have clear contracts that you can refer to
Although Áinee Ávila, a creative designer and founder and editor of Álula magazine, wasn’t able to make her business with friends succeed, she still recommends starting a business with friends. Even though their business dissolved, they were successful in keeping their friendships intact after everything.
Looking back, Ávila points out the importance of having clear contracts that you can refer to when things get heated. “When things got really messy, and we were very emotional about it, we at least had a contract to stick to, so it was very clear in terms of money,” she explains. “We weren’t arguing about money; we were arguing about the vision of the business.”
The potential for failure in going into business with friends
Not every business born out of friendship has a happy ending. Although his current business was established with friends, Mashkov has had businesses not work out with friends as well. In his present situation, he acknowledges that he is very lucky. “Overall, I don’t recommend it because it’s literally playing Russian roulette,” he says. “You have to get very, very lucky that you jive well with these folks or you have to take your time easing into it.”
Running a business with a close friend is not suited for everyone. But it can be rewarding and successful, provided you are equipped with the right tools and mindset. As Cunningham points out, “If you trust your partner as your friend, I think that being the basis of your business agreement can take you the distance.”
By understanding your friend’s strengths and weaknesses, fostering clear communication, leveraging individual skills and setting boundaries, you can navigate the unique landscape of friendship-driven entrepreneurship and turn your partnership into a flourishing business.
This article was updated in April 2024. Photo by GaudiLab/Shutterstock.com
