If you happen to have that entrepreneurial spirit, you’ve probably dreamed out loud about your aspirations to your good friend, and they’ve probably dreamed out loud about theirs to you. You may spend countless hours bouncing ideas off of each other and planning out how you’ll spend your first Million in your future life.
If you both dream of starting a business, there may even be times that you talk about starting a business together, but is that a good idea? It depends.
There are so many layers to this question that there’s really no clear cut answer, so let’s look at a few of the things that you should consider before you decide to take the plunge plunge and basically take a blood oath with your friend in business.
- Is your friend trustworthy?
You should consider whether you completely trust this friend with your money and essentially, your life. If you know them to be shady with other people, there could be a chance that the same shadiness could come out toward you.
2. Are you trustworthy?
On the flip side, it’s time to be honest with yourself. Do you do shady shit to other people or have a habit of burning relationships? If the answer is yes, and you truly love your friend, maybe you should avoid going into business with them until you get it together.
3. Will you both be contributing the same amount of time, money, and effort into the business.
Consider who will contribute what. Maybe one person will contribute more money and the other will contribute more time. Maybe you will both contribute the same amount of money and time. Just be sure that you’re both okay with whatever arrangement you come up with.
4. Do you have a clear understanding of what your business agreement is?
This is where it’s probably a good idea to get a lawyer involved. At the bare minimum, put your agreement in writing. Spell out what each of you are contributing and what your expectations are. This will make it easier for you both should you run into any gray areas that could become a point of contention down the road.
5. Have you ever had major issues or near breakups before?
If you and your friend have had knock down, drag out fights before, just be aware that the pressure of going into business together may magnify any underlying tensions 100 fold. Be sure that you all have cleared the air and you’ve both moved on from past disagreements.
6. Will you both be dedicated in the long run?
Commitment to your business will need to be a certainty. Especially if the business needs both of you in order to thrive. The last thing you’d want to do is to start pouring your life savings into your business, only to have your bff quit on you and you lose everything.
7. Do you all compliment each other’s strengths and weaknesses?
Being the Yin to your friend’s Yang could be an asset for your business. For instance, if your friend isn’t a people person but you are, you can pick up the slack for your friend when dealing with customers. If you compliment each other’s strengths and weaknesses, you’ll be able to work together to get much more accomplished than you could alone.
8. Do either of you know what you’re doing?
If at least one of you is experienced in business or happens to be an expert in whatever business you decide to go into, great! If not, you’ll have to work harder to make up for the learning curve. Either way, consider whether knowledge, or lack thereof, makes a difference to you in having a business partner.
9. Are you willing to take the risk of losing your friend for your business?
Most importantly, you’ll need to seriously consider whether the possibility of losing your friend for your business is worth the risk. Relationships that involve money can go left really quickly, because — money. People are sensitive about cash, and rightfully so. Hope for the best and prepare for the worst. Make peace with the fact that starting a business with your friend could very well kill your relationship, although we hope that it won’t.