A lot of times, people have great business ideas with their friends or family members. A lot of times, people end up going into business with their friends, with their family members, or with their spouses or loved ones. Sometimes parents even go into business with their kids. Studies show actually that most American small businesses that are co-founded are brought about by people who knew each other on some level prior to deciding to engage in business together.
Starting a business with your best friend can sound like a lot of fun, and it often is. However, just like with anything else out there, there are some pros and cons that need to be considered before one embarks on this kind of venture and game. There are a lot of great things about starting a business with your best friend, but there are some negative possibilities that need to be considered too before one dives totally head first into the endeavor.
Things to Keep in Mind When Considering Business with a Friend
Listed below are five things to consider when getting ready to take the leap into a business with your friend:
- Do you trust them? Not only is trust probably the single greatest factor in business, but it is also the most important factor in really all of your life too. Trust is the single most important factor when you are getting ready to embark upon a business venture with your friend, so be sure that trust is completely there for you and your friend.
- Is your friend committed to the brand? This is also important. You can have a friend who is a brilliant person, but if they are not totally devoted to the brand and to all that it stands for, then both you and your partner and the business will struggle as a result of it.
- Does your friend have skills or experience that you don’t? This is another important one. If you are going to be going into a business plan on a fifty-fifty basis with your friend, then you better hope that they can bring something to the table that you can’t bring, and vice versa.
- Are they stable in life financially? This is key, to say the least. Your friend does not have to be wealthy, but they do need to be financially well set up. When starting a business, personal finances become so immensely involved in the matter that people tend to suffer if one or more business partners is having financial troubles and difficulties of significant proportions.
- It doesn’t hurt to do a beta test of how the business would go before you even start the business itself. In doing this, one will essentially show you what you are working with and what would happen in real life with that friend. You need to know if your friend is a person of action or if they need instruction all the time or a combination of the two. Are they an ‘in-charge’ kind of person who always needs to be the leader and the boss? Can they follow your lead sometimes or not?
Starting a business with a friend more often than not is a great thing and is quite rewarding. However, it can be harmful sometimes when people do not consider the factors necessary to really look into the idea before embarking upon it. Now more than ever it’s important for friends to consider the above points before they jump into something, lest they end up making a decision that is very dangerous and negative for them.