A very close friend of mine was considering a business opportunity that would involve me. There was hesitation on both our parts as to whether this is a smart move; our friendship is much more important to us than business. The concern was that in the event of a disagreement on some business matter, our relationship may be jeopardized. It is not my first business venture with a partner, nor is it a first with a partner who is also a friend.
This led me to inspect similar past relationships; which ones worked, which didn’t, and why.
My conclusion is that there are three main elements required for a partnership to thrive. While this is true for any business relationship, it is even more so when partnering with a friend:
1. Agreeing upfront on:
a. Short and long term visions: this must be crystal clear and not just “let’s make lots of money.” The more detailed the vision the better. While a business vision may change over time, given fluctuating circumstances, it is the blueprint for the business and thus of the relationship, including who does what, what happens as the business grows, what happened if the business doesn’t grow, exit points, etc.
b. How to part ways if things won’t work out, or, if one of the partners just wants to move on to something else. As a good old friend and a past business partner of mine used to say (quoting his dad): if there is an agreement upfront on how to separate, a divorce is less likely to happen.
2. Total trust: with partners who had also been friends, I had successful business relationships only when there was complete and total confidence. With a new partner, trust is something that can take years to build. Going into business with someone that already has your trust and that you trust him/her, is a big advantage. One of the worst business relationship I ever had was with a friend that I knew to be a crook. Yet, I ignored it because I wanted to believe that he will not cheat me, his friend. I was quickly proved wrong. So, as a sub-clause for this item: always be completely honest with yourself. If you know a friend to be of weak character when it comes to misleading others, you can remain friends but stir clear of going into business together. A snake may change his skin but the new skin is still covering the same old snake.
3. Open communication and mutual respect: it is imperative in any relationship, not just business, to talk things out, and the sooner the better. Never use emails to address conflicts; if you cannot meet face to face, pick up the phone. With immediate and direct communication, almost anything can be solved. Respect is, of course, also critical, and here too, going into business with someone you already know and respect can be a big plus. If you do not respect someone NEVER go into business with them.
Learned from: a business opportunity with a close friend.