How to successfully start a business with a friend
Should you bring your friend into your grand business vision? It’s hard to start a business with a friend. From studying thousands of founders for his book, “The Founder’s Dilemma“, Noam Wasserman of Harvard Business School found that well over 50% of startups fail due to co-founder conflict.
Should this entirely dissuade you from starting a company with a friend, partner or even husband or wife? Not necessarily.
It’s undoubtedly a complicated thing to navigate. However, being friends with your business partner helps you understand their point of view. You can respect their wishes in a way that can be difficult with strictly your business associates.
You know so much about one another and can communicate more clearly, as both friends and business partners. Get clear on the type of clients you want to work with and start forming a broader vision for your company.
The key to closely working together is to be open and honest with the other person, as Nicola De Burlet, at The PR Studio shares. After working together for two years have set up a company together.
“It is like a weird marriage. We have been going through a shareholders agreement – a bit like a “business prenup”. This is the most important thing – so many friends have been burnt”.
Separation of roles
Everyone has their role and team of specialists to accomplish particular tasks. When panic strikes, and you’re doing it all by yourself, all the questions come to you. With co-founders, depending on the scope of the problem, it goes to the best person and team to handle it.
Work on a small project together to figure out your working style and see how you both work under pressure. If a project falls apart and you’re not doing business together, it’s better to walk away.
Jessica Warch and Sidney Neuhaus come from traditional diamond mining families in Antwerp but moved to London to start Kimai. This modern fine jewellery brand uses solar grown diamonds and recycled 18k gold. They share how they both work to their strengths and know how to start a business with a friend.
Know what area each other owns in the company. One person can make the final decision without any ambiguity or resentment whenever there is a disagreement. You need to be able to resolve problems quickly and efficiently when running a business
Understanding strengths and weaknesses
It is crucial to define what you bring to the table from the get-go. Everyone should explicitly know their role in the company. If there is an overlap in the skill sets between founders, you can find a way to separate them by defining each others’ strengths.
Be honest about your strengths and where you can contribute the most.
Marie-Elise Worswick, the co-founder of Tayberry Tuition and Consultancy, admits to being fortunate that while they consult each other on the running of the business, she and her co-founder have our areas of expertise.
“Jo has been working as a tutor and educational consultant for 30 years, and my expertise is in marketing for a global audience, so we each have quite different focuses. However, we both have the same values and goals, most notably ensuring we can help as many families as possible with their child’s educational journey.”
Using a shared system to organise projects with your co-founders can increase productivity and efficiency. Moreover, you will cut down on miscommunications and decrease confusion and frustration.
The key is to know what your strengths are but also to share out the not so fun jobs.
“I do all the new business contracts and accounts because it was my business initially, and Sarah joined me. As co-founders, we share new business outreach, and then whoever brings in the business is the lead on that account,” Nicola De Burlet shares.
“We have a team meeting every Monday morning and run through all the clients, priorities, and who will handle what. We also have a couple of freelancers working with us, so we allocate tasks to them too.”
Be equal motivators
To move forward, you need to take accountability for what you do, mistakes and all, and make sure you operate on the same frequency as your counterpart.
“I have been so grateful, time and again, for having Ant as a co-founder, and I think the whole experience has been far more fun for working with him. We continuously bounce ideas off each other, and it’s made the journey far less lonely,” shares Jacob Wedderburn-Day. He co-founded Stasher and Treepoints with his Uni friend Anthony Collias.
“My advice would be to put the friendship to the side when it comes to decision-making. Your approach should be to make frequent quick decisions and reassess and iterate, not debate decisions for ages and then argue about them afterwards. When your judgments become too clouded by emotion, you have a problem, and when it comes to starting a business, this is suboptimal.”
Think of hiring as a football team. Sure, you want people you like and get on with, but if they’re not the best for the position, it doesn’t matter if it’s your best friend. It matters how they perform.
Especially when it comes to communication and emotion, remember, as Maya Angelou said, people will forget what you did, but people will never forget how you made them feel.
Share your values
Define your unique value proposition together and make sure you passionately believe in an identical vision.
Deepak Tailor and his partner Tom Church started a business together called LatestDeals.co.uk. They started it five years ago and worked on an idea together. Starting the company helped to grow their friendship and help the business be a success.
“We know what each other are good at and so try and help each other carry our daily, weekly and monthly tasks”, he admits. All of you need to believe in the same mission for the greater goal that you have for the company or product. The plan needs to be made as straightforward as possible.
Our friendship has helped to make the vision of the company a success. We already had a solid friendship, and that has been cemented further with the growth of this company
When looking to start a business with a friend, there are some essential things to remember, a few crucial things.
When you start a business with a friend
- Discuss whether you are both on the same page when it comes to both the company and personal aspects of the business
- Set some ground rules early on to avoid any conflict down the road and work on your strengths together
- Identify core strengths, weaknesses and roles to create a strong ecosystem
- Make sure that both of you are dedicated to making the business a success and are willing to put in the time required
Starting a business with a friend can be one of the best decisions. You have someone to share the load with, but you also have someone to brainstorm ideas and grow a business together.
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