Going Into Business With Friends: Best Practice

Last Updated: 

March 27, 2023

Friends can be a great asset in your business. But it's important to start off on the right foot by setting up clear expectations, dividing duties and responsibilities, and making sure you have a plan. In this article we'll talk about some key points to consider when going into business with friends.

Key takeaways on starting a business with friends

  1. Communication is key: Make sure you have open and honest communication with your friends before going into business together. Discuss your expectations, goals, and concerns to ensure everyone is on the same page.
  2. Create a formal agreement: Even if you're working with friends, it's important to create a formal agreement outlining each person's responsibilities, ownership stake, and how decisions will be made.
  3. Know each other's strengths and weaknesses: Identify each person's strengths and weaknesses to ensure everyone is working in roles that play to their strengths. This can help prevent conflicts and ensure the business runs smoothly.
  4. Keep personal and professional relationships separate: Make sure you maintain a balance between your personal and professional relationships. Don't let disagreements in business spill over into your personal life, and vice versa.
  5. Be prepared for challenges: Running a business with friends can be challenging, so it's important to be prepared for disagreements and conflicts. Have a plan in place for how you will address these issues when they arise.
  6. Celebrate successes together: Running a business with friends can also be incredibly rewarding. Celebrate your successes together and make sure everyone feels valued and appreciated.
  7. Consider the future: As your business grows and changes, it's important to consider how your roles and responsibilities may evolve. Be open to making adjustments to ensure the business continues to thrive.

By following these best practices, you can increase your chances of successfully going into business with friends.

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The business idea.

The next step is to figure out what kind of business you want to start. It's important to keep in mind that your business idea should be something you are passionate about and can make a profit from. Additionally, it should be something that doesn't require too much investment in terms of time or money, and ideally can be run from home.

If none of these criteria apply, think about how they might be amended: For example, if the idea isn't profitable yet but could become profitable with some tweaking (e.g., increasing prices), then go ahead and try it out! If there's no way around needing outside funding or hiring employees right away (which will require more time), then maybe this isn't the right choice for now.

Getting to know your friend.

The first step in determining whether your friend is a good fit for the business is getting to know them. You'll need to take stock of their strengths, weaknesses, and overall personality. If you have any doubts about their ability or willingness to work hard enough for the long haul, it's time to think again about whether they're right for your startup.

Another important consideration when deciding on a co-founder is their character: how will they treat others? Are they trustworthy? Do they have integrity? Will this person be able to make decisions without being overly emotional or impulsive? Your business needs someone who can keep calm under pressure; if not, then there will definitely be times where things get heated between team members and having someone around who keeps things cool under fire could save both time and money down the road!

Discussing the risks and rewards of a startup.

If you're considering starting your own business, there are a few things to keep in mind. First, think about the risks and rewards of starting a business. The first thing to consider is whether or not it's worth it for you. Do you have what it takes? If so, then go for it!

The second thing to consider is how much money do I need to start my new venture? This can vary depending on many factors including size and scope of operations as well as market demand (for example if there isn't enough demand for pet grooming services in town). You may also want to factor in other expenses like advertising costs or legal fees associated with opening up shop so make sure that all these numbers add up before making an investment decision based on them alone; otherwise they could end up costing more than necessary while still being unable meet expectations set forth by investors who were hoping see returns come back within two years' time frame which would mean losing out entirely if nothing else happened along those lines."

Setting expectations.

When you're starting a business with friends, it's important to set expectations early on. If you don't do this, you can get into trouble later on down the line. Consider these questions:

  • What does each person expect from the business?
  • How will we deal with any problems that come up?
  • How do we make sure everyone is happy and getting what they want out of this partnership?

How to share the workload and duties.

Sharing the workload and duties is a crucial part of working with friends. While it may be tempting to simply split up tasks based on who you think will do them best, this can lead to resentment down the line. Instead, take some time before starting your business together to make sure everyone understands their role and how much time they'll need to dedicate toward it.

In addition to sharing responsibilities among yourselves (and possibly hiring an employee or two), there are several other ways that you can divide up your work:

  • Profit-sharing: If one person owns 51% of the company while another owns 49%, then they should share profits equally unless otherwise agreed upon in writing beforehand by both parties.
  • Responsibilities: It's often easiest if one person handles accounting while another deals with marketing; however, this isn't always possible depending on what kind of business model you're using (for example if one person knows nothing about computers but would like access anyway).

How to spread the word about your business.

There are many ways to get the word out about your business. You can use social media and traditional methods like flyers and newspaper ads, but the most effective way is paid advertising on websites like Google Adwords. You can also use free advertising on social media: for example, if you post a picture of your product on Instagram or Facebook it'll show up in people's feeds and they might buy it!

A startup is never easy, but it can be fun with friends!

Going into business with friends can be an exciting, rewarding experience. You know each other well and have similar goals, which makes it easier to work together. But there are also challenges that come with working with someone you care about. Here are some tips for making sure your startup is as successful as possible:

  • Make a business plan. Write down what you want from your company and how you'll achieve those goals and then share this plan with everyone involved in the startup! This way, everyone has an understanding of where they stand in relation to one another, which will help ease any tension that arises during the process.
  • Be able to work together effectively while maintaining trust among team members (and outside partners). Communication is key here; if one person isn't communicating well enough or acting appropriately according to agreed-upon rules, then that could cause problems down the line and nobody wants drama! So make sure everyone understands how things should go before starting up anything official; otherwise there may not be enough time left over after dealing with these kinds of issues later on...

FAQs on starting a business with friends

Starting a business with a friend can be a great thing, but you need to have the right expectations going in. If you think your friendship will be put at risk when you take the plunge into business ownership, the best thing is to nip it in the bud and avoid having anything to do with your friend's business in the first place.

Should we form an LLC or partnership?

  • LLCs are better for a startup or professional relationship.
  • LLCs are better for small businesses, because they can have more than one member.
  • LLCs have less reporting requirements than corporations, but they're also more expensive to set up and maintain.

Can friends be successful co-founders?

The answer is yes, friends can be successful co-founders. But you need to be careful about how you approach the relationship.

If your friend has the same values as you and shares your passion for your business idea, then it's likely that they'll be invested in what's best for the company too. And since they're someone that trusts you implicitly and knows all of their weaknesses (and so do you), they'll also be able to provide valuable support during tough times.

Why do co-founders break up?

There are many reasons why co-founders break up.

  • Differences in opinion: If you and your partner disagree on how the business should be run, it's unlikely that you will be able to work together.
  • Conflict of interest: If one co-founder wants to take a riskier approach than another, or if one believes that they should be paid more than their partner(s), this could cause problems down the line when making decisions about spending money and time (which we'll talk about later).

How much should I give my co-founder?

One of the most common questions I hear from co-founders is, "How much should I give my co-founder?"

In general, there are two ways to answer this question. The first is based on equity and the second is based on salary. Let's look at both options:


We hope that you’ve found this guide useful and learned some valuable lessons about how to get your business off the ground with friends. The key takeaway is that it’s important for you and your co-founder(s) to develop a clear understanding of what each person brings to the table before launching a startup together (and then keeping those expectations in check throughout). You can also make sure that both parties are on board with taking risks and sharing the workload (but not too much; remember: no one wants to be put at risk!).

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