Though it might not work for everyone, starting a business with a friend could work if you know what you’re getting into.
Starting a business with a friend is a huge gamble. No matter how hard you try, it’s impossible to separate the personal from the professional, and you can very well lose a friendship should your business fail. And let’s face it, the odds aren’t in your favour—80% of businesses fail within the first 18 months.
But some people have made it work. Take Bill Hewlett and Dave Packard, college friends who founded Hewlett-Packard in a one-car garage in Palo Alto. Bill Gates founded Microsoft with his childhood friend Paul Allen. The founders of Ben & Jerry’s were close friends from high school.
So is it worth it to go into business with your friend? Not always, but if you do things right, you could succeed. Here are a few things you need to keep in mind to keep in mind when thinking about turning a best friend into a business partner.
1. Know how you work together
You and your friend might have great chemistry, but that doesn’t always translate to the workplace. According to Harvard Business School professor Noah Wasserman, who studied almost 10,000 startup founders, the least stable founding teams were friends—friendships increased the founder turnover by a whopping 28.6%.
However, if you understand how you and your friend work together, you can use your shared history to your own advantage; according to Wasserman’s research, the most stable teams were past co-workers.
2. Find a friend who complements your skills
You and your friend have different strengths and weaknesses, but do you complement each other? If you and your friend are too similar, that could actually spell disaster—you’ll have the same blind spots and the same weaknesses, so instead of collaborating, you’d likely end up clashing.
In business, it’s best to find your opposite in terms of skills and talents. For example, you may be the more outgoing and creative sort, while your friend could take a more logical and pragmatic approach. That way, you can step in to fill your partner’s gaps, and vice versa.
3. Set clear roles
Once you’ve taken stock of each other’s strengths and weaknesses, it’s time for you to delegate roles. Who will be CEO? Who will be Head of Sales? Who will handle finances?
Collaborating on every single task might sound fun and exciting when you start, but unless you set clear roles and boundaries, meddling in each other’s tasks is a quick way to get on each other’s nerves and get nothing done. You should be able to trust your partner to do her job well, and she should be able to trust you.
4. Bring in new perspectives
If you build a founding team made entirely of close friends, you’d be setting yourself up for failure. With your similar backgrounds, viewpoints, networks, and ideas, it would be harder to create a clear picture of what your business be to succeed.
This is why you should venture out of your social circle and consider outsiders when you’re making your first hires. They’ll bring a fresh perspective to your company that you were sorely lacking.
5. Get used to giving (or taking orders)
In general, friends don’t give each other orders. But if you’re working together, you have to set aside your ego and get used to giving and taking orders, as well as constructive criticism. Don’t tiptoe around the issue if you need to tell your friend to do something, but at the same time, you should be able to listen to their feedback, especially if they’re the subject matter expert.
6. Have a plan for failure
As we mentioned earlier, there’s a large likelihood that your business might fail. Discuss the different outcomes and how you’ll handle them early on. Not many friendships survive a failed business venture, but if you make a game plan for these scenarios early on, you might be able to save your relationship if your business does go under.