Comments on: Going Into Business With a Friend: Smart Move or Dumb Idea?

By: Tim

Tim — Fri, 03 Aug 2007 07:45:54 +0000

being friends does not guarantee success in anything whether in business or as roommates. the problem is the friendship portion getting in the way of everything. this is why communication and definite delineation in the partnership agreement is necessary.

shadox: friendships aren’t always based on people who you trust. i have friends that i enjoy, but wouldn’t trust them with money or kids. your analogy of going into battle is a bit off. yes, you should know and trust them, but at the same time business is business and a decision you dislike should never be taken personally.

By: Shadox

Shadox — Fri, 03 Aug 2007 04:02:06 +0000

I strongly disagree with MoneyNing. You should only go into battle and into business with people you know and trust. Only do so if your relationship is strong enough to withstand the ups and down on business, but if you make it through, your friendship will be much stronger than before.

You definitely have to document everything in advance to make sure your expectations or all in line and your conflict resolution options are known to everyone.

By: Ben

Ben — Fri, 03 Aug 2007 02:37:08 +0000

Thanks for the feedback everyone! It helps to think through all different angles and your experiences bring up some points I hadn’t thought about.

By: MoneyNing

MoneyNing — Thu, 02 Aug 2007 22:21:44 +0000

It puts much strain on your friendship and most of them won’t work out so it’s better to be partners with people you actually don’t know.

By: Joe

Joe — Thu, 02 Aug 2007 03:12:54 +0000

I have experiences trying to go into business with some of my buddies – of course this was while we were pretty young, and didn’t understand what it took to be successful. I have shuddered to think about inviting someone else to join in the venture with me since.

I have, however, made friends with my coworkers and bosses since then. I believe that I could go into business friends again if the opportunity were right.

As always… prepare for the worst, but strive for the best.

By: The Financial Blogger

The Financial Blogger — Wed, 01 Aug 2007 23:58:09 +0000

I think the key point is communication. I guess that in the long run, even if you start a business with someone that is not your friend, chances are that if the business is successful, you will become friend!

Spending so much effort and time together will surely bring you to a certain level of friendship if the adventure comes with positive results.

Be clear, all the time. I personally give more importance to friendship than money. This is why I am making sure we agree on all point we discuss. If not, you might lose more than a couple of dollars…
Cheers,
FB.

By: Jeremy

Jeremy — Wed, 01 Aug 2007 23:32:34 +0000

I’ve done it twice and I’d be weary about trying it again. Granted, in each instance we went the complete legal route, had very detailed plans, agreements, etc. So even though it never came to suing or anything drastic, it strained and ultimately ruined the friendship.

It didn’t happen overnight, this was over the course of about 3 years, but when you are in business with someone else there WILL be differing opinions and you’ll be spending a lot of time with them, which can be difficult.

All legal stuff aside…

I don’t think there is a right or wrong answer to the question, I just think you need to ask yourself one thing. How would you feel if your friendship with that person changed or ceased altogether? If you are comfortable with that potential outcome, it may make sense to move forward. If this thought bothers you, it may be something to reconsider.

By: Tom

Tom — Wed, 01 Aug 2007 13:51:59 +0000

First of all, you BOTH need attorneys – separate ones! A single attorney cannot work with both of your best interests in mind.

Second – dont let the size of your project get in the way of what I mention above.

I made this mistake once. The agreement needs to state exactly how everything will dissolve/split should it become necessary. If not, the law dictates how it works (and it is likely not in your best interests at that point).

You could easily find yourself being sued for many times more than the entire business is worth.