The world of business is filled with companies that were started by friends – think Bill Gates and Paul Allen who founded Microsoft or Google founders Sergey Brin and Larry Page who were college buddies. In these instances, the friendship was developed through shared passions for technology and practical jokes.
But while these partnerships are often successful, the businesses they’ve created have also been the cause of many failures. Research suggests that a lot of business success is down to a number of factors, including vision, values, honesty and conflict resolution.
It’s always a good idea to be upfront about your goals, and you should both be able to have open, honest discussions with one another. If you have conflicts with one another that you can’t discuss or resolve, they’ll eventually come up in the business and could be disastrous for the company.
A friend can be a valuable resource when you’re trying to navigate tricky situations, such as a change in business goals, or when you need to get advice from someone who has been there before and has seen what works and what doesn’t. If you’re a business partner with a friend, be sure that you can trust that they won’t take advantage of your relationship with the company and will contribute their fair share.
You should also be clear on how you’ll share the responsibility of running the company. This will ensure that the two of you won’t be working in separate silos.
While you’re building your business, make it a point to schedule check-ins with each other. This will help you to stay on top of each other’s progress, even when things get busy.
The best business partnerships are based on complementary skills and talents, says Noam Wasserman, associate professor of business administration at Harvard University. In other words, if you’re great at sales but terrible at product development, you’ll never be able to run a successful business.
If you’re looking for a business partner, make sure that they have similar interests and values. If you and your friend disagree about how to achieve a business goal, it’s unlikely that your friendship will survive a serious disagreement.
Be careful about putting money in the same account as your friend’s personal funds. This can make it hard to track your business’s progress, especially if you aren’t in the same place in life.
It’s a good idea to draw up a contract with your friend before you go into business together. This will protect both of your assets from the other party in case something goes wrong.
You’ll also want to keep in mind that a business isn’t just about working hard; it’s also about having fun. It’s a good idea to schedule time away from the office and just hang out with your friend to keep your friendship strong and healthy as you build your business.