When taking the leap of faith on a business, people will often look to friends to join them. There are a couple of reasons for this. The first is it is nice to have someone hanging it all on the line with you. The second is the friend may have a particularly skill that looks attractive in relation to the business. The third is the most common, the friend has money! Regardless, many businesses are kick started with two or more friends as owners. Is this smart?
There is an old cliché that you should not go into business with your friends. Unlike many clichés, this is one you should pay attention to. The cold, hard fact is most businesses will not make it. Most will fail within the first two years. If you don’t believe me, go try to borrow money for your business. One of the first questions the lender will ask is how old the business is? If you make it past the two year mark, lenders will throw money at you. If you are even a month short of it, they will barely speak with you.
When starting a business, it is important to understand that a business relationship is much different than a friendship. A friendship is something informal that is really restricted by nothing other than the time you choose to spend together. A business, on the other hand, has to be run each and every day. In relationship terms, going into business with a friend is like getting married. There will be good days and bad.
So, should you go into business with a friend or not? There is no clear answer to the question. Every situation is different. What is clear, however, is you should not storm off and start a business without discussing the issues involved. What issues? A frank discussion needs to be undertaken on what is expected of each person, where the business is seen going, how money will be handled and so on. The more you discuss, the better. Once this occurs, you both will have a better idea as to whether going into business together makes sense.
A good friendship is a valuable thing. Make sure you don’t ruin it by going into business together.
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