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Going Into Business with a Best Friend?

Ok, so here’s the dillyo… my best friend and I are trying to come up with the benefits of going into business together, as opposed to doing it independently, and being more successful.

Money means nothing if you can’t spend time to enjoy it, and who better to spend it with than a best friend/loved ones.

On the other hand we wouldn’t make as much money as if we did the same thing but independently.

We could motivate eachother to keep eachother pulling the weight

It could potentially ruin our friendship through competetiveness etc.

Ugh!!! I JUST DON’T KNOW!!! We’ve been debating back and forth with it all night but all the logical facts seem for us to go at it alone. The thing is we both don’t want to ruin the friendship… gahhh i don’t know what do you guys think?

What kind of business will it be?

Set some ground rules. Such as what to do when you disagree on a descision.

Business is business. While at work your business partners, not friends.

If money is your only reason for starting a business, your probably better off just getting a job.

The company I work for is run by two guys who were friends since childhood. They’re both tech guys and both have the same sort of skill set. Working together worked well for them.

When it was just the two of them, they’d both hunt out leads, but generally take on projects individually and only get the other involved if they got stuck on something.

Since I’ve been working in IT, I’ve made friends with some of my competitors, and although we are in direct competition (offices within 1 street of each other, so fighting over the same clients) we still get coffee most mornings together and have passed on leads to each other if we’re getting swamped under with current work.

Saying that, I’m an easy going guy. I keep work and personal life seperate, to the point where I’ve had a blazing row with my boss at work, then gone out for a drink after work the same day and chatted about other stuff and had a good time.

You could always go it alone, then if either of you gets a big project, bring the other one in to help out and split the profit down the middle.

If you have the business mindset and so does your friend go for it. Just remember, everything you both have to do can only be done for the good of the business. No egos, no personal crap. All for the business.

Like 2 parents taking care of the baby. Literally. Literally. literally.

Do a good job and make good decisions. With some work and Luck It can grow however you visualize it growing. Just make sure you have an image in your mind of what you want it to become, that and a business plan.

[quote]hardgnr wrote:
What kind of business will it be?

Set some ground rules. Such as what to do when you disagree on a descision.

Business is business. While at work your business partners, not friends.

If money is your only reason for starting a business, your probably better off just getting a job.[/quote]

Why is that? The only real reason to open a business is for profit or a lifestyle. Or you can go into a lifestyle business and do that for profit.

Do NOT go into business with friends and/or family…It will ruin everything!
Speaking from experience 2 times.

if there is money involved, get a contract in place so everyone knows ahead of time what people’s roles and responsibilities are, how differences will be resolved, how money will be distributed, what happens when the business ends, etc.

If you can’t agree to these issues befopre you start the business, don’t do it. You won’t be able to agree to them later and the friendship will end when you run into issues. i have seen what happens when people blindly go into business together and have decided not to get into business with people when we could not agree to basic issues ahead of time.

It depends. There are a lot of issues that can come up with one person not pulling as much weight as the other. I’ve noticed that different people have very very different concepts of what it means to work hard. One of my good friends is a genius, works 60 hour weeks and runs his own business.

I would never in a million years go into business with him (even though it would be lucrative) because I am just not that hard of a worker - I don’t want to work more than a 40 hour week (not that I have a problem with extra hours sometimes, just not on a regular basis) because at this point in my career I just don’t have to.

The only way I could see it working is if we were contractors under the same name but billed out seperately - i.e. he charged clients his own rate and got paid for his own hours and I did the same.

Other than that it depends on how agreeable you two are, and how easy it would be to resolve arguments. If you guys are two really hard workers and have a solid plan you probably won’t deviate from and no foreseeable conflicts, then who knows, it might work out.

Hmm thanks a lot guys I appreciate your input
We would be doing the same thing more or less… and we could always help each other out when either of us are in a rut… I’m just hoping we don’t get too competitive over this and it puts a strain on our friendship…

We still have to talk it out but I appreciate your guys’ help :slight_smile:

So much of it is personality dependent. You need to honestly evaluate whether you can keep business and personal issues separate.

My ex husband and I started a business together and now he’s my ex. On my part, I can’t keep business and personal separate and will never do that again. In addition, sometimes issues come up in a business that may change your opinion of the person you are partnering with. For instance, I’m as loyal as a retriever but he would change suppliers at the drop of a hat.

Like a few others have said, be honest with yourself and document responsibilities. It may work well for you. If it doesn’t, at least you don’t have to divorce him :slight_smile:

Have you made a formal business plan? One that delineates your precise roles in the business?

If you’ve put a lot of time and research into the business, and you trust your friend’s business acumen, why not? Ben and Jerry have done very well.

2 Things:

  1. Don’t start a business without a written business plan.
  2. If you do it together you need to have a written agreement. Also, 50/50 doesn’t work. Someone will have to have ultimate control even if it is 49/51.

One of my biggest litigation projects was representing a guy who sued his business partner and former best friend because he didn’t trust him, money was disappearing, etc.

It was a complete clusterfuck.

Documentation was crap, neither guy kept his business and personal stuff separate, and the original partnership agreement was drafted by a retarded monkey.

If it works out, it will be great and you’ll think everyone who warned you was retarded…if it doesn’t work out, you will be broke and lose a friend.

[quote]Gregus wrote:
hardgnr wrote:
What kind of business will it be?

Set some ground rules. Such as what to do when you disagree on a descision.

Business is business. While at work your business partners, not friends.

If money is your only reason for starting a business, your probably better off just getting a job.

Why is that? The only real reason to open a business is for profit or a lifestyle. Or you can go into a lifestyle business and do that for profit.

[/quote]

Well almost every person I know who has gone into business has neither money or lifestyle, that is if their business is still going after 12 months.

I used to work in a bank at the business banking centre in an area with hundreds of small businesses. Very few of these businesses were successful. They could have been, but the directors just weren’t really business minded enough.

My uncle started his own business a long ago and was reasonably successful. He struggled alot, and stress has led him in hospital a few times but he told me its a real dog eat dog world, and with a good job your not really any worse off in the long term. Although I doubt many people working normal jobs could afford a $40,000 membership fee to play golf.

But still, the richest people in the world became rich through business. You can’t save yourself rich.

[quote]hardgnr wrote:
But still, the richest people in the world became rich through business. You can’t save yourself rich. [/quote]

Absolutely right. 99% of the time you’re never going to become rich by working for someone else. You can become “comfortable” or “well off”, but most newly-made multi-millionaires become so through starting their own business and/or learning to invest.

Depends on what kind of business it is. If its a mix of manual labor and paperwork, someone will always lean toward doing one of those tasks themselves. For me it caused problems down the road because the partners start comparing apples to oranges, with each person claiming to pull more weight. Like ouroboro_s said “it’s personality dependant.”

  1. Get a contract that sets out the terms of profit sharing
  2. Post a unbiased third party as arbitrator in all disputes
  3. Clearly state responsibilities and authority of each partner
  4. Specify dissolution of partnership process
  5. Specify buyout terms (if one wants to leave)
  6. Specify debt ratio
  7. Specify capital sharing ratio

CHECK YOUR FRIENDSHIP AT THE FRONT DOOR. (once inside the office, you are two guys out to make the most amount of money possible for your company)

Ditto this. Don’t do it! It nearly ruined several relationships for me and things are still not what they were.

If you can’t do it on your own find another source of funds besides a friend/family.

Monopoly

[quote]pushmepullme wrote:
One of my biggest litigation projects was representing a guy who sued his business partner and former best friend because he didn’t trust him, money was disappearing, etc.

It was a complete clusterfuck.

Documentation was crap, neither guy kept his business and personal stuff separate, and the original partnership agreement was drafted by a retarded monkey.

If it works out, it will be great and you’ll think everyone who warned you was retarded…if it doesn’t work out, you will be broke and lose a friend.[/quote]

Check out a book called E-Myth Revisited by M. Gerber. They have a section on partnership. If your worried about competition, you need to sit down with your partner and decide who will be in charge of what jobs based on each of your strengths. That way you both can do your individual jobs and since you have already agree that one of you is better at something than the other you won’t fight about it later. Just my 2 cents.

call me old fashioned, but: DON’T FUCKING MIX FRIENDS AND BUSINESS!!!