A recent article featured on Forbes’ website titled, “3 Rules For Starting A Business With A Friend,” discusses the steps to take when planning to launch a new venture with friends.
In the article, contributor Sonya Stinson shares the story of two friends, Seth Sarelson and Jonathan Treiber, who met on move-in day as freshmen at Cornell University. After graduating in 2004, they both worked for the same company, which sparked a desire to venture off and start their own business.
“For Sarelson and Treiber, the years of friendship served as a vetting process for choosing each other as business partners,” writes Stinson. “Going into business with someone you know and trust offers many advantages.”
She continues, “Still, mixing business with friendship can have pitfalls. Just look at the pair of former friends who fell out after founding Snapchat and ended up as bitter foes in court. To avoid that fate and set yourself up for a successful partnership, it’s important to lay some ground rules at the start.”
Stinson offers three tips to help the new startup and the friendship stay strong when launching a business with friends:
- Put a detailed partnership agreement in writing. No matter how close friends may be, getting a detailed partnership agreement in writing can help safeguard the new business and govern the working relationship, especially in the event of a conflict. This agreement can help to spell out what to do when facing a disagreement. Consider hiring a corporate attorney when developing the contract.
- Choose roles wisely. Friends can all share the role of “co-founders,” however, the work responsibilities should be divided up amongst the partnership. In the article, Stinson provides insight into the working relationship among four friends who started a company together. “Before launching the company, each partner took the Myers-Briggs Type Indicator® test. The results gave them insight into their personalities and helped pinpoint the roles for which they were best suited,” explained Stinson in the article. “Several months into the business, they created a day-to-day decision matrix that outlines what kinds of choices they should make as a team and which ones individual members could handle.”
- Do your fair share. Each partner in the business must commit to doing his or her fair share, especially during the long hours often spent launching the startup. When friendship is involved in a new business venture, sometimes emotions can get in the way. Don’t let resentment, a disagreement or any other negative emotion get in the way of what is best for the business. Each business partner must pull his or her weight in the business to help avoid any emotional conflict.
Read the entire article on building a business with friends here.
