We’ve all heard the horror stories; two friends go into business together, then lo and behold, the relationship turns sour. It’s a tale as old as time, providing a forewarning for the rest of us to ‘never mix business with pleasure’.
And really, it should come as no surprise — undertaking a new business can be extremely stressful even in the best of times. Difficult, impersonal decisions constantly need to be made in the name of creating the best future for the company, leaving those who are ill prepared in the dust as their friendships are left in ruins.
Starting a business with a friend is not something to be taken lightly — but if you both enter the venture with your best foot forward, it can also be the best decision you ever make.
Here’s five important questions you should ask yourself before going into a new business with a friend.
Do you both share the same goal?
Lay all your business goals out on the table from the get-go, and even as the business evolves and your goals shift overtime — keep the communication lines open by regularly checking in with one another on this particular topic. In doing so, both parties will stay in sync, which will keep you both continually motivated to work towards the same result.
What skills do each person bring to the business?
Running a business requires an array of skills, skills that are unlikely to all be held wholly by one standalone individual. An advantage of having a business partner means you’re able to take advantage of the other person’s skills that yourself may lack.
Co-founder of WedShed, an online booking platform for wedding venues, Amy Parfett comments on behalf of her childhood friend, turned business partner Melany McBride, “Mel is incredibly level-headed and amazing when it comes to problem-solving. She’s the nuts and bolts, numbers and budgets, client liaison and business acumen. I admire her ability to critically analyse any situation and make a well-informed decision on the spot.” She continues, “I on the hand, am more focused on the creative side of the business; the marketing, brand-building and communications. We really complement one another.”
The act of allocating business roles needs to be both honest and precise: “We nutted out all the things our business needed and then split out the ownership based on what we’re good at and get excited about,” says Amy.
How much time will you each devote to the business?
Once your individual roles are set in stone, it’s important to consider how much time will be required by each of you from week to week. Initially, both parties should keep tabs on how long their designated tasks are taking, then make a note to swap notes regarding the results. If one person’s hours, far outweighs the other, then it may be necessary to reassess and readjust certain responsibilities.
How will you deal with disagreements?
Whilst sharing a business and sharing a friendship are two entirely different beasts, like any type of relationship, sometimes disagreements will arise — but this isn’t always a bad thing. The trick of the trade here is facing all difference of opinions head on with one another, however uncomfortable it may be. So before you go into business with a friend, you have to ask yourself if this is something you’re both willing to do.
For Erin Hawks and Linda Abousejean, co-founders of Deitea, an upmarket and boutique tea brand, being great friends outside of their business plays to their advantage when disagreements arise. “Linda and I have been friends for over five years, says Erin. “As we have grown the business, there have been various conflicting ideas, however, as we are both very close outside of our business, we have learnt to be candid with one another, which we believe is crucial to maintaining both a strong working relationship and friendship.”
Can your friendship handle it?
Considering all of the above, perhaps the most important question to ask before going into business with a friend is whether or not your friendship can take the heat. Starting a business requires a real partnership and honesty plays a big part in that. So if you can’t envision having to be brutally honest with your other half, then you might have to think twice about the business venture.
Pauline is a Sydney-based journalist for Domain and is frequently featured amongst various Fairfax Media mastheads including The Sydney Morning Herald and The Age.