In the current highly competitive business environment, teaming up with friends can provide a distinct edge. Strong partnerships can significantly impact success. For some individuals, these partnerships arise from long-standing friendships, built on a foundation of trust and shared understanding. There are inspiring examples of successful business partnerships that originate from friendship. However, there are also numerous cautionary tales where such collaborations have ended in conflicts and misunderstandings.
What are the keys to successfully managing a business with friends? Six entrepreneurs offer valuable insights and lessons derived from their personal journeys.
Is it wise to venture into business with a friend?
Launching a business is a challenging undertaking, so partnering with someone you enjoy can appear to be an ideal solution to reduce stress and enhance enjoyment. While this can certainly be true, there are essential best practices to remember when embarking on this path.
When you go into business with a friend, it’s crucial to recognize that the nature of your relationship may shift. Communication will likely require a more formal tone (especially during business hours or while interacting with other staff), emotions must be kept in check to maintain a professional work environment, and personal connections should have clearly defined boundaries to ensure effective management.
5 suggestions for partnering with a friend in business
There exists a comprehensive set of recommendations for navigating the business landscape alongside a friend. Keep in mind these suggestions from seasoned entrepreneurs who have successfully walked this path.
1. Recognize when to introduce a business partner
Jeriel Sydney, co-founder of FABLERUNE, returned home from a trip to Europe with aspirations to create a small-batch skincare business. As she pursued her dream and began to develop her client base, her friend Bobbie Cunningham frequently visited to assist her. As the business expanded, Cunningham’s involvement also increased. It soon became clear to Sydney that a partnership with Cunningham could be advantageous.
“I felt overwhelmed, and Bobbie has always been a calming influence for me, so bringing her on board felt like a lifeline,” Sydney recalls. “There were significant changes that needed to be made, and I knew I couldn’t tackle them alone.”
2. Recognize each other’s strong points and weaknesses
When evaluating a friend as a potential business partner, it is essential to assess their strengths and weaknesses. Artem Mashkov, CFO of SwagUp, and his friends acknowledged their respective strengths and weaknesses, which facilitated the creation of a successful partnership.
“You learn where their challenges are, you identify the gaps, and you know how to complement each other,” Mashkov notes. About his partners, he explains, “Michael [Martocci] has a forward-looking mindset. I tend to be more cautious. And Helen [Rankin] excels in executing tasks and addressing challenges head-on.”
Upon Cunningham’s integration into FABLERUNE, their contrasting skills contributed to their success. “We recognized qualities in each other that we lacked ourselves to build this business,” Cunningham shares. However, it did take them time to find their respective roles.
“Initially, we assumed we were responsible for every aspect and ended up tripping over each other,” Sydney admits. As their business matured, they learned to enhance efficiency and appreciate each other by harnessing their individual strengths.
Co-founders Jade Schwarting and Lisa Mullen of the PR agency dble collective collaborated for several years before launching their venture. Drawing from their past experiences working together, Schwarting asserts, “Lisa and I have always had an unspoken understanding about our roles, contributions, and participation.”
Throughout the process of defining roles and responsibilities, open communication is vital, Mullen emphasizes. “It’s crucial to openly acknowledge each other’s strengths and weaknesses and feel at ease discussing solutions—whether that involves collaborating, hiring additional support, or redistributing responsibilities—these practices have significantly benefited our business,” she explains.
3. Handle challenging discussions in a business partnership with friends
Effective communication is essential in any partnership, but it becomes even more critical when working alongside a friend. Schwarting underscores the importance of directly addressing concerns and frustrations to avoid misunderstandings and maintain seamless business operations. “Being straightforward in communication is crucial, especially when the partnership primarily consists of just the two of us,” she highlights.
A shared vision is fundamental to any business. Sydney feels that being transparent in these discussions simplifies matters. “For anyone who establishes a business, there’s often anxiety about whether your vision will be acknowledged and valued or if you’ll lose part of your identity,” Sydney states. “These concerns frequently arise, but we continuously engage in dialogues to ensure our vision is preserved.”
She also stresses the significance of managing emotions in a business setting, considering the substantial investment involved. “Bobbie taught me that if an issue arises, we should address it immediately. We don’t have the luxury of time to sit with it. Quickly tackling it stops our feelings from escalating,” Sydney advises.
When emotions become overwhelming, Cunningham recommends taking walks to have essential conversations. “We often go for walks to discuss pressing matters. The movement tends to ease the tension during difficult conversations. Also, our workspace offers limited private areas, but these walks provide the perfect setting to address issues when frustrations arise or when we need to troubleshoot something within the business,” Cunningham notes.
For Mashkov, having a foundation of friendship simplifies the process. He understands that ultimately, his partners have good intentions. He considers the trust built through personal connections a significant advantage when working with friends. “Although we encounter conflicts and differing opinions, we resolve them through data-driven discussions, which has proven to be effective,” Mashkov says.
4. Set clear boundaries for a healthy equilibrium
Finding a balance between work and personal life can be daunting when your business partner is also a friend. The lines between work and personal life are likely to blur, making it challenging to disconnect from work entirely.
Schwarting mentions that one of their objectives is to establish defined boundaries and working hours.
“It’s crucial to differentiate when communication relates to work and when it pertains to our friendship,” Schwarting explains. “We also need to set clear expectations regarding our work hours, ensuring I’m mindful to communicate with Lisa only during those times about business-related matters while keeping our friendship-related conversations separate.”
This method permits them to disengage from work and concentrate on their friendship. Mashkov, who has had experiences both successful and otherwise while working with friends, concurs that distinguishing work from personal life is vital.
“Maintain a complete separation,” he advises. “When you’re out with friends, simply engage as friends. Avoid discussing business. While it’s challenging to refrain from mixing the two, stay devoted to business during work hours and reserve personal times for friendship.”
5. Establish explicit contracts that can be referenced
Even though Áinee Ávila, a creative designer and founder/editor of Álula magazine, did not achieve success with her business venture alongside friends, she still advocates for embarking on business partnerships with friends. Despite the dissolution of their business, they managed to preserve their friendships in the aftermath.
Reflecting on the experience, Ávila emphasizes the necessity of having clear contracts in place to refer to during contentious moments. “When situations became particularly complicated and emotions ran high, having a contract provided clarity, especially regarding financial matters,” she states. “Our disagreements arose over the vision for the business, not from financial disputes.”
The risks associated with going into business with friends
Not all business ventures stemming from friendship lead to successful outcomes. Despite currently running a business with friends, Mashkov acknowledges experiences where such partnerships have not fared well. He expresses gratitude for his present situation but remains cautious. “Generally, I would not recommend it—as it can feel like playing a game of Russian roulette,” he remarks. “You must be exceptionally fortunate to have compatible partners, or you should take the time to gradually explore the dynamics.”
Managing a business alongside a close friend may not suit everyone, but it can indeed be fulfilling and prosperous if approached with the right mindset and tools. As Cunningham highlights, “If you trust your partner as a friend, leveraging that trust as the foundation of your business relationship can carry you far.”
By recognizing each other’s strengths and weaknesses, maintaining open lines of communication, harnessing personal strengths, and establishing clear boundaries, you can effectively navigate the unique landscape of entrepreneurship grounded in friendship and develop your partnership into a thriving business.
