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3 Tips to Start a Healthy Business Relationship With a Friend

Dear Professor Savings fans,

“OMG! I have the best idea ever, let’s start an online shopping business. Best Friends Forever!”

Few months later, the business crumples and your friendship is on the ROCKS!

  Today we share our insights on the heated topic of whether it is a good idea to start a business with a friend.  Our approach is not to provide a formulaic approach but just to highlight or showcase some tips and resources.

   Surely, there have been many instances of best friends starting business that have turned out very well.  Notable mentions include Larry Page and Sergey Brin who started Google together in 1998.

  Their relationship worked due to their common passion with computers at an early age and also had parents that were university professors.

  Ben Cohen and Jerry Greenfield are the founders of Ben and Jerry’s ice cream known for their creative flavors in 1978.  They worked out because they had the common approach about giving back to the community.

Read 10 Super Successful Cofounders And Why Their Partnerships Worked from Business Insider.

    On the other side, read Inc. 2014 Biggest Co Founder Break Ups.

Here are our top 3 Tips to Consider When Having a Friend as Your Co Founder.

1) Make sure you define your roles.

Startup founders must realize that SPEED is KING so it is important to define roles so that decisions can  be made.

2) Stalemate.

Write down a protocol to follow when decisions need to be made but are stuck at stalemate.  Should we spend $3,000 on a public relations team?

In this case, how will this be decided?

This relates back to point number one  If you have defined roles, you can allocate the decision making to the person in charge of that role.

3) Define business terms.

It can be great to have your best friend as your co-founder but realize that at the end it is a business relationship. So terms need to be defined. For instance,

Wow is the exit strategy decided?

How are the expenditure of money dispersed?

From our experience, we have seen that simply two people with two creative minds and energy can look at the problem the same way but decide to take two different approaches.

Bottom line is don’t assume what the other person is thinking, but really communicate the details and thinking process on certain decision execution.

When business is doing well, things might seem like a splendid garden but when chaos arrives it is important to be able to resolve disputes for the good of the company.

For more resources, read Mashable’s How to Start a Business With a Friend — and Actually Remain Friends

Hope this helps and feel free to leave some comments.

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