Co-founders and childhood friends, Stephen Ufford and Tanis Jorge, are working on their fourth startup venture together, qualifying them as “friends with business benefits.”
“There are plenty of pros and cons associated with starting a business with your best friend, but for us, the pros definitely outweigh the cons,” said Jorge, co-founder and COO at Trulioo.com, a global identity verification provider. “We know each other’s strengths and weaknesses and fill in the gaps as needed without the need for long drawn-out discussions about who does what and why. Most importantly, before we began our first startup together, we developed a business pact that remains strong and true since 2000.”
Establishing a set of ground rules prior to starting the business can help you get off on the right foot. Here are three tips for starting a small business with friends, and maintaining the relationships:
Commit to Communicating Early and Often
Establishing rules regarding frequency and manner of communication between the partners is the lynchpin of working with friends. Just because you both share a passion for your business does not necessarily mean that you have the same perspective on each and every decision that will need to be made. Talking through tough decisions and coming to mutually agreeable terms strengthens both the relationship and the business. On the other hand, ambiguity exposes the cracks in relationships and can be a pitfall. Regularly scheduled, open and honest communication is an essential part of a successful partnership.
Be Specific When Defining Roles and Responsibilities, But Allow for Cross-Training
While initially delineating roles and responsibilities is essential, it is probably not enough. As businesses grow and evolve, so do the roles of the partners. It is one thing to decide initially that partner A has her set of tasks, while partner B has his, but what happens when new tasks surface? An ongoing conversation is necessary to keep the roles well-defined.
Also, circling back periodically to redefine responsibilities has the added benefit of highlighting potential areas of cross-training. Businesses that are run with “islands” of responsibility are much more likely to suffer from devastating results from small setbacks, like a short-term illness of one of the partners, than businesses than that have multiple avenues to complete essential tasks.
Agree That Relationships Always Come First, Unless the Business Does
Partners must set out with the understanding that in the heat of the moment, decisions may need to be made for the good of the business that may chafe one partner or the other. Egos will sometimes need to be checked, and gentle honestly employed, in order for the business to prosper. Knowing that each partner respects the other, and takes the success of the business seriously empowers them to make wise, if not popular, business decisions. Take prisoners later. Ultimately, the profitability of the business has to take precedent over the egos involved, in order for the business to succeed.
While conducting a business within a partnership model certainly presents challenges, it can be very personally and professionally rewarding. Deepening your relationship, while affording the partners much more freedom than would be possible in a sole-proprietorship, are two distinct advantages. So, investing the extra time in preparing your relationship for the strain of shared business ownership will benefit all parties in the long run.