They say that pursuing a startup with buddies is a big no-no, but how come the best ideas are almost always conceptualized among friends? Mixing business with friendship can lead to a lot of drawback, but not if you agree on basic ground rules up front. Here are three that you should consider:
Rule #1: Put your partnership on paper.
Ram Morales II, owner of Pomodoro Pizza, Yuan Asian Bistro, and Muceno Open Food Park, says as close as you are with your business partner, you still need a clear legal document to govern your working relationship, especially when shit hits the fan. After all, there are things that you don’t think about when you’re starting out that are going to be critical for your business in the long run.
"I experienced it first hand with two close friends of mine who used to be best friends turned mortal enemies because of not having paperworks with their previous business. People's true color will come out when you guys are dealing with money and business," he says.
Meanwhile, Forbes.com suggests that you hire a corporate attorney who will detail your partnership in writing, and make sure the contract has provisions covering how to resolve disputes over the direction of the business. It’s an inconvenient truth, but one that is necessary.
Morales adds: "One thing I learned from my lawyer: it will cost you way less to be preventive than to be curative."
Rule #2: You can’t call dibs on a position.
Before launching your business, each member of the gang must know what his or her role is in the company. You can make decisions as a team, but someone has to be in charge, especially on the marketing, financial, and operations side of things. Entrepreneur.com recommends that you identify each other’s skill set, choose the role for which you’re best suited, and divide your responsibilities.
Juan, who came from a sales background, would probably make a good chief executive officer. Manuel, who excels at tackling operational details, should be the chief operation officer. See where this is going?
Rule #3: Be willing to pull your own weight.
Getting your business off the ground will take months of grueling work, which is why each partner must commit to doing his or her fair share. You can’t be on a beach somewhere while your partners are doing 100-hour weeks—it could lead to disputes over delegation of work and relationship burnout.
Abbie Victorino, founder of StyleGenie.ph, advises: "The positive culture should start within your friendship and spread on as you grow your business. Sadly, if a friend or partner doesnt share the same vision and lacks follow through, it will be harder to part as business partner and remain friends. Always communicate to avoid any misunderstanding."
Emotions will run high and conflicts will happen; there will be times when friendship is the only thing that’s keeping everything together. But then again, that’s the upside of being friends with your business partners—the bond (and love) is there no matter what.