Starting a business with another person can be fulfilling but sometimes risky—especially when running a business with a close friend, according to uschamber.com/co.
It can be challenging to balance your personal relationship with your professional partnership, but there are many benefits to running a business with a friend.
Following are tips to consider if you and a friend are planning to start a business.
Get everything in writing. Before starting a business with a friend, draw up paperwork to put your partnership in place. Consider meeting with a lawyer to draft a business plan and ensure you are covering everything. Having it all in writing will protect you and your business partner/friend from potential issues.
Establish a shared vision. Talk to each other about the business idea and potential obstacles you may face. How will you address these issues, and do you agree about the proposed solutions? Ensuring you share a similar vision is crucial to your success.
Clearly define your roles. Evaluate each of your strengths and weaknesses to determine the appropriate roles. Make sure you have a strong understanding of your unique responsibilities so you can properly delegate work and collaborate.
Create a realistic budget together. When determining the right budget, ask the following questions: How will you pay yourselves? How much will you invest directly into your business? How much will you need to set aside for things like taxes, employees, supplies and other expenses? Every budget should include estimated revenue, fixed costs, variable costs, one-off costs, cash flow and profits.
Communicate often. Miscommunications can have lasting negative effects—especially when occurring between co-owners. Communicate often to ensure you are both staying on top of your tasks. If you encounter issues or have questions, you should feel comfortable communicating with each other and asking for help.
Separate work from play. You and your business partner likely will continue spending time with each other outside of work, but limit business talk during your personal time. And during the workday, do not waste time venting about personal issues.