Thinking about starting a business with your best friend? Here are 11 essential tips to consider before you take the plunge into entrepreneurship together.
Friendships often serve as the foundation for thriving businesses. Many successful companies have been founded by close friends, from the fashion-savvy duo behind Juicy Couture to the mothers who created Tasty.
“Choosing a friend as a business partner lets you work with someone you truly like and respect,” says Nicole Zangara, LCSW, author of “Surviving Female Friendships: The Good, The Bad, and The Ugly.” However, merging friendship with business can be tricky.
If you're considering teaming up with your best friend, here are 11 vital tips based on experiences of others who have successfully navigated this path.
Assess Compatibility as Business Partners
Being great friends doesn’t automatically mean you’ll excel as business partners. For instance, your friend's habit of being late might be charming in social settings but could become frustrating in a professional context. Amy Creel learned this firsthand when she co-founded Smart Mom LLC with her best friend, only to face a major fallout that led to her buying her out. “Friendship alone isn’t enough; you must ensure you can work together effectively, just like traveling with someone,” she advises.
Ask yourself: Do you share the same work ethic and goals? Have you managed conflicts previously? “Dig deep and avoid getting swept up in the excitement of starting a business,” she cautions. “This will be a challenging journey, so be honest about whether you can endure it together.”
Establish Expectations and Goals
To ensure alignment, have an open discussion about your business objectives, advises Zangara. “Talk about what you envision for this business and ensure you’re on the same page.”
For Grace Clapham and Solonia Teodros, founders of The Change School, it was crucial to outline their goals and sustainability from the start. “Create a timeline for key milestones and review personal and startup finances to confirm you can sustain yourselves,” Teodros emphasizes.
Consider part-time work or freelance projects to support your finances as you launch, and be upfront about your available time and financial situations.
Document Everything
Regardless of whether you form an LLC or file for a DBA, having formal documentation for your partnership is essential. “Women often shy away from confrontation, but you need to have a clear written agreement that covers all scenarios,” Creel states.
Marianne Gere and Kim Strengari, owners of popular restaurants in Pennsylvania, recommend consulting a partnership lawyer. They can help you outline terms for unforeseen situations, like one partner wanting to exit or the valuation of the business if something happens to one partner.
Avoid Financial Conflicts
Money can create tension even among the closest friends. Amy Weicker, who partners with writer Brenden Dilley, advises against mixing business and personal finances. “Open a joint business account for shared access and protect your personal interests in case of a lawsuit,” she suggests.
“Establish clear financial transparency from the start. No partner should withdraw funds without the other's knowledge,” Weicker adds. Hiring an accountant can help maintain clarity on financial matters, as Kathy Geller Myers and her partner did when managing their taxes.
Keep Work and Friendship Separate
Sharon Fornaciari Maher, co-founder of RJ Square LLC, emphasizes the importance of treating your collaboration as a business. “Friendship brought us together, but our shared business acumen and strengths ensure our success,” she explains.
It’s challenging to avoid mixing personal and professional conversations, but Heather Carson and her partner have a system. They declare whether they're speaking as friends or business partners to maintain boundaries. Meredith Silversmith and her partner even set up separate iMessage streams for business and personal chats.
Assign Roles According to Strengths
Experts suggest pairing with someone whose strengths complement, rather than mirror, your own. Amie Hoff, who co-founded FitKit.com with her sister Beth, highlights the importance of defined roles. “Beth manages marketing and finances, while I'm the face of our brand, focusing on PR and customer interaction,” she explains.
Once roles are established, trust each other to manage your responsibilities without interference, advises Stephanie Allen from Dream Dinners. “Let your partner handle their tasks without micromanagement.”
To stay aligned, consider using a shared platform like Evernote to keep track of each other’s activities, as suggested by Gauri Nanda.
Recognize Small Achievements
Starting a business is demanding, so it’s vital to foster an encouraging atmosphere. “Create a supportive environment where you can celebrate each other’s successes,” Myers suggests. “It’s refreshing to work in a space filled with support and kindness.”
Weicker emphasizes the importance of celebrating even minor victories. “We make it a point to recognize positive feedback or achievements, which helps boost our motivation and morale,” she explains.
Prioritize Open Communication
Whenever uncertainty arises, communicate openly. “Don’t let frustrations build up; they can create tension,” Zangara advises. Both partners need to be assertive and express their feelings honestly.
Carson has a rule: if emails start piling up, she picks up the phone to avoid misunderstandings and expedite solutions. “Your partnership requires work, just like any relationship,” Silversmith adds. Regularly assess what’s working and what can improve.
Master Conflict Resolution
Disagreements are bound to arise, even among the best partners. How you handle these conflicts is crucial. Teodros emphasizes the need for flexibility and a willingness to compromise. “Trust each other to make decisions, even if they don’t always align,” she advises.
Allen encourages curiosity about differing perspectives during disputes. “Ask questions to understand each other’s viewpoints, which helps prevent reactive responses.”
Regarding mistakes, Weicker reminds partners to practice forgiveness. “Everyone makes errors, and holding onto grudges can harm both your partnership and friendship.”
Maintain Your Friendship
Don’t neglect your friendship when you enter business together. “It’s essential to separate work from leisure,” Silversmith advises. Dedicate time to social activities without discussing work, as this promotes the health of your friendship.
Nanda and Hill begin each workday by connecting as friends, which strengthens both their personal and professional relationship. “Some of our finest work has emerged during casual hangouts,” she notes.
Allow for Breaks
Working closely with a friend can lead to the need for occasional breaks. “Take time off and encourage your partner to do the same,” Weicker suggests. Stress can build, and it’s important to communicate when you need a break to recharge.
Taking time apart can prevent burnout, benefiting both your business and your well-being. A little downtime can fuel your success.
