Like Damon and Affleck or Ben & Jerry, best friends have been making the transition into the world of business for as long as we can remember. There is a strong sense of comfort in knowing our partners ,inside and out , before setting foot into the office; a comfort that can’t be found on Linkedin, Indeed or ZipRecruiter. But, like moving in with your best friend, starting a business with a buddy comes with a hefty disclaimer:
“In the likelihood that things do fall apart, we (the universal we) warned you, and we (the universal we) are not responsible for any damage done to said partnership or friendship.” Despite the many discouraging voices, the few who have successfully mixed business and pleasure will tell you that it is a magical combination. It is a best of both worlds scenario that strengthens both our work life and friendship.
Byron and Dexter Peart, the founders of Goodee, best friends and twin brothers, said this about working together “We just seem to do better together. Some of that fear that creeps in when you try to do something on your own goes away when you have someone that you can wholly and completely trust in the process; someone that helps push you along when things start feeling like they’re not going to come together.”
So, how do you turn your friendships into flourishing co-founderships?
We’ve discovered that the key to going into business with a friend isn’t about luck; it’s about planning. We’ve put together a list of 7 crucial questions to ask before making your first printing business cards (do people still do this?) / buying your first domain:
What is your vision, your long-term vision for our project?
Starting a business is an exciting new venture that can breathe life into any career; doing so with a friend is that much more inspiring. Before getting started, it is essential to determine whether or not you have a compatible long-term vision for the proposed business venture. Is it your goal to sell the company as soon as the right buyer comes along? Will you use your first investment to secure a splashy office space or invest that money back into the company? Do you see yourselves becoming giants like Amazon and Coca-Cola? Or are you looking to be the best in your local market? Whatever your respective goals may be, make sure they are aligned; this will protect your mutual interests in the long run.
Are you partners?
Establishing the share of power in any new business should occur as soon as possible; there is nothing worse than a micromanager with no authority. When going into business with a friend, ensure that what you are entering into is truly a partnership. Are you working for, or with each other? Does a more significant investment mean more equity? Safeguard your friendship and new venture by putting in writing the terms of your business. There is no time like the present to create a founder’s agreement. “This legally binding document will be a joint agreement between the founders highlighting key guidelines and terms that will structure the different scenarios that may occur.” according to Fast and Company.
What happens when you disagree?
What happens if you disagree on a fundamental decision? Does your voice override your colleague’s or vice versa? Knowing how you plan on handling disagreements is just as crucial as having aligned goals. Founders of Formation Movement studio Shakeira (Saschie) Maclean-Magbanua and Roman Magbanua shared their winning formula. In cases where they don’t see eye to eye, their rule is simple, “whoever has invested the most amount of time and effort into a project, holds 80% of the final decision”. This rule has helped them keep the peace and maintain a high level of respect for each other’s work and authority.
Who’s responsible for what?
Minimize any workplace confusion by having clear and delineated roles; this will make it easier for you, your partner, as well as the people working with you. Identify each other’s strengths and weaknesses and allow that to shape the way you operate.
Co-founder and CPO of Perimeter 81, Sagi Gidali, said this about his decade long co-foundership with close friend Amit Bareket, for Fast and Company
“When Amit and I first started SaferVPN, we made a clear separation of responsibilities. I was in charge of all of the design, product, and marketing aspects of our startup, and he took ownership of all of the infrastructure and development-related features. While we continuously bounce ideas off of each other and give each other advice and input, we both have a clear vision of our individual responsibilities, which helps the business flourish.”
How committed are you?
Before being inextricably linked to a colleague, you should probably find out how committed they are. Are they invested in your project full-time? Is this their main gig or side hustle? Heading into a large-scale commitment like founding a new company without knowing the answers to these questions has the potential to result in a lot of resentment. It is often the case that one team member will have to take the lead and allow their co-founder to make a more gradual transition. Not everyone with an entrepreneurial spirit can afford to quit their day job and dive into their new project. Set a timeline with your partner for when you will both be “all in”; expectations are easier to manage when you lay all of your cards on the table.
When is it time for work and when it time for play?
A word that will become increasingly important when going into business with a friend is “boundaries.” Although you may have all-access relationships with your friends, that might not translate to our shared work-life. Creating separate spaces for your friend chat and work chat is vital for both of your relationships. According to Forbes, “Your time spent working together isn’t quality friendship time. Make sure you’re clear on the distinction and carve out time for both.” When you are working, maintain a level of professionalism to fuel your productivity. When the workday is done, close your laptop and dedicate time to your friendship; after all, you were friends first.
What happens if you break up?
Although a contingency agreement may take the “romance” out of a new business partnership, getting these terms in writing will streamline your business. People often assume that mutual respect will prevail over bitter disputes, saying, “ We are too good of friends to fight over the business.” Having an exit strategy helps us circumvent the emotional decision-making that can result from a business breakup. We suggest putting pen to paper (finger to keyboard); eliminating one “what if” at a time. Going from Bestfriends to Co-founders can be well worth the risk, but we suggest that you invest in a good business Lawyer; you will not regret it.
You’ve probably noticed a recurring theme while reading this article which is “don’t wait to have the difficult conversations.” So much of what ends up dissolving partnerships and damaging friendships begin with simple miscommunication. One of the benefits of starting a business with a friend is being able to say what’s on our minds, knowing that the other person understands our intentions.
For sisters and friends Natalie and Samantha Mwedekeli, co-founders of Mama Rocks Burgers, this was key, saying, “We know how to disagree with each other. We are sensitive but know how to communicate with each other without tiptoeing or hurting the other person.”
Open communication isn’t always pretty, but it is the only way to balance these two significant roles. The truth is, by getting those uncomfortable chats out of the way at the beginning, you may discover that you want different things, and that’s okay. On the other hand, you may discover that you’ve found someone that you can trust and who shares your vision.