Should You Consider Your Best Bud for a Business Partner?
You have a brilliant idea for a new business, and need someone's help to make it happen. Chances are, you're thinking about asking your friend to join you. This sounds perfectly reasonable on the surface; why wouldn't you choose a person you already trust and get along with?
And to be fair, there are plenty of reasons to start a business with a friend. You have a good relationship, know each other's strengths, and can communicate openly. It's also a lot more fun to work with him than some random stranger.
However, there is a big difference between shooting hoops with your bro and working with them for more than 40 hours a week. Even if there are advantages to working with someone you like, many entrepreneurs warn that friends don't always make good business partners.
The Risks of Partnering with Your Best Bud
When you take the plunge and decide to go into the world of entrepreneurship, it's not going to be all fun and chugging beers after closing a huge deal. If you aren't careful, there are some serious downsides to mixing work and pleasure.
1. Communication - Yes, communication can be a downside. Are you comfortable with pointing out the mistakes on his work? Brutal honesty is often necessary in business, and both partners must understand that any criticism is purely professional, not personal.
2. Adversity - Most businesses will go through a few (or a lot) of rough patches. How well can you two work together when the bills are piling up and the sales are lackluster? You need to make sure that both of you can handle the bad times without pointing fingers at each other.
3. Finances - Even when things are going great, you need to remember that money can sometimes change people. Oh, they probably don't intent on stealing anything, but they may start thinking that they deserve more. If you don't put how you will split profits in writing, prepare for arguments down the road.
The biggest risk is that should the business turn sour, you may end up losing both money and a good friend. Running a business puts a tremendous amount of pressure on everyone, and this can strain even the best relationships.
Guidelines for Making it Work
This isn't to say that you should never try, however. When everything does work out, a business partnership rooted in friendship can be extremely rewarding. You just need to be very careful, as not all friends are really suited for the job.
Make sure that the two of you have similar work values, and have the same goals. Are you willing to pull all-nighters and sacrifice weekends? If so, then your bro should be as well. The last thing you want is to have a partner that doesn't take the business as seriously as you do.
They also need to have certain valuable skills that complement what you already have. Are you a people person, but can't code or design anything? Let them fill that gap, and be the one who brings in the clients. Neither of you want to feel redundant.
Above all, get absolutely everything in writing beforehand. We mentioned this earlier, but business partners are prone to arguing after several months. Make sure that the contract clearly stipulates work responsibilities, commitments, and most importantly, how you will share the profit (and losses).