Some of tech’s biggest and most successful companies, including Apple, Microsoft and Google, were launched by best friends. Ideas that started on couches and in the most casual of settings made their way to board rooms, IPOs and billions of customers.
5 Things to Do When Starting a Company With a Friend
- Make sure you’re compatible business partners.
- Align on goals and expectations for the business.
- Create roles for yourselves based on your strengths.
- Communicate with each other constantly.
- Make time to nurture your friendship.
I started my entrepreneurial journey for SoLo, a U.S.-based community finance tech company with more than 1 million users, alongside my best friend, Travis Holoway. We’re going into our sixth year of being business partners and have gone through the highs and lows of building and operating a startup as a team.
Creating a business with your close friend can be risky, especially if you don’t plan in advance or think things through. Here are five steps to consider before deciding to mix business with friendship.
Make Sure You’re Compatible
It’s not enough to be friends when you want to start a business. You need to be compatible with one another. It’s easy to figure this out even when you haven’t worked together before.
Think about your friend’s qualities and how they function in life. They have to inherently fit within your work model and vice versa. They need to have qualities that you lack or aspire to have. You almost have to view your friend as you would view an additional hire based on your needs.
If this is not aligned, the lack of alignment will cause emotions to run very high, which tends to happen more when friends work together. You want to avoid letting personal conflicts get in the way of your company. Just because you like each other doesn’t mean you can successfully run a business together.
Align on Goals and Expectations
Your values have to align if you’re going to get into business together. Stick to transparency in all conversations even before you start a business to make sure you’re going into it with the right partner. If your best friend wants the company to be a nonprofit and you don’t, for instance, that’s a problem you need to sort out before going all the way in.
When building SoLo, Travis and I wanted the business to become a B-Corp, and we were determined to put purpose above profits. And seeing how this would be a massive undertaking to accomplish, we made sure to discuss the required time and other commitments needed to run a B-Corp when we first started the business. Both parties need to be in total agreement about what they want their business to achieve.
Create Roles Defined by Strengths
Define roles and responsibilities out of the gate when planning a business with a close friend. Do your skills complement each other? Identify each other’s strengths and address potential setbacks in your business to fill in the gaps.
For example, we’re both co-founders. Travis is CEO because he’s great with finances, organization and administration. I’m more involved with the user and end product, so my title is president. We both are capable at doing it all but we are aligned to our strengths. We use this as our guide for knowing who owns what.
Develop some sort of understanding for one another’s capabilities that make a good team. The mistake future founders often make is getting a best friend business partner who has similar skills. This ends up making it harder to define your roles and daily tasks, leaving room for confusion and sloppy mistakes.
Communicate Constantly
If something is bothering you, always speak up. As friends, it can be understood if you ignore texts and maybe not respond here and there. But as business partners, this can’t happen. Don’t let frustrations come to an all time high that end up getting in the way of what needs to be done at work.
The ability to communicate comfortably and honestly is vital in any business. Working with a friend can be less intimidating when it comes to exploring difficult topics. Avoid going back and forth over email or DM if it keeps causing confusion. Pick up the phone and express your thoughts so that nothing can be left to interpretation.
Nurture Your Friendship
Working so closely with your best friend changes the dynamic when it comes to finances and personal risks that weren’t there before. Never allow money or a business ruin your friendship. It’s not worth it, and crucial that you separate professional time from personal time.
It’s true that the line between friend and partner can get blurry. Travis and I usually try to spend a few hours of the week together where we don’t do any work or talk about work. This is when we usually get our best work done — when it’s not forced and we’re just motivating one another.
It’s incredibly rewarding to start a business with your best friend and get to share your vision with someone closest to you. Before you decide to make your partnership official, consider all of the above first to ensure you’re each ready.
