Friends as business partners – Pros and Cons

When starting a new business it seems logical to partner with a close friend. However, many people underestimate the stress a business will put on friendship. I've seen life-long friendships ruined from business relationships gone bad. Developing a friendship is not the same as building a meaningful business relationship – and that distinction is important because you won’t get the same results.

Being friendly in business is necessary but friendships in business aren’t. That’s an important concept. We can have a valuable business relationship without friendship. Unfortunately, many mistakenly believe that the first step to building a business relationship is to develop a friendship.

However, while building any business, challenges are certainly going to arise. Starting a business will put any relationship to the test. Business and money matters bring up all kinds of emotional responses that test a friendship. In some cases, facing challenges together strengthens the bond. In other cases, it breaks the bond.

Good thing about doing business with friends

The primary benefit to working with friends and family is that you already know their capabilities. This cuts down on the learning curve of working with a new person, and the initial employee training has the potential to go faster because you are know what they do and do not need to learn. Unfortunately, in most cases, the advantages of such a partnership end here.

First, the pros:

1.You trust each other: Your closest friends are people you trust.

2.Positive work relationship: Dreading work certainly isn't a problem considering friends are friends for a reason--you like spending time with them. They challenge each other to improve and dream bigger.

3.You can speak freely and comfortably: Friends don't have to worry about political correctness or tiptoeing around issues. 

4.You share the same vision of leadership: Friends tend to think alike, which can be a great thing, particularly if you're pitching an idea to a client or prospective customer. If you know what your co-worker is going to say next, it's easy to set him or her up, without looking orchestrated.

5.More friend time: Spending all day with his best friends is the best part of working with them. We get to come to work and talk about TV, sports, and whatever is going on in the world. It's pretty fun.

6.They Accept Your Strengths and Weaknesses: Your best friend can make you feel encouraged and supported. But you can also trust them to be forthright about your strengths and weaknesses, unpack what you did right or wrong and then help you develop a plan to move onwards and upwards.

And the Cons:

1.You know too much

2.Boundaries are fewer

3.Knowing the same people: When you share the same networks as your friends, it can be challenging to find new connections.

4.Performance Issues Are Awkward to Address

When you work with a friend, your relationship will change. It's inevitable. But how it changes - for better or worse - is up to you. Starting a business with a friend can be one of the greatest experiences of your life. But it's not a decision to make lightly. You will often spend more time with your business partner than you will with your family, choose this partner wisely.

A good friend does not always equal a good business partner. If you do decide to go into business together, it’s important to set boundaries that you both agree not to cross. For example, expecting favors and exemption from the rules is not only bad for your relationship, but it can also easily bring down a business.

The most important thing to remember in cases like this is that you should always find business partners, based on merit and not on their relationship to you. If you’re going to move forward as business partners, it’s important to always put the friendship first. Keep the lines of communication open, and always tackle problems head on; there’s no room for hiding your feelings and being passive aggressive. On a lighter note, doing business with friends and family does have one inherent advantage – in the event anything goes wrong, you know where they live!

Time will tell if my best friends and I will make it for the long haul, but for now I’m really enjoying the experience. Should you have any questions regarding entrepreneurship and leadership, please write me at [email protected].