A number of big name businesses in a number of industries are run by pairs of close friends — from the fashion-forward pals who launched Juicy Couture nearly a decade ago, to the moms (and BFFs) with a passion for healthy snacks who founded Tasty.
“Many times we don’t get to choose who we work with,” says Nicole Zangara, LCSW, author of “Surviving Female Friendships: The Good, The Bad, and The Ugly.” “One of the advantages of going into business with your best friend [is] that you get to spend time with someone you really like, respect and admire. That can make working a lot more enjoyable.” Still, it’s no secret that mixing friendship with finances can be risky.
If you’re thinking about turning your partner-in-crime into your business partner, here are 11 tips to take into consideration, courtesy of women who have been there.
Follow These Steps Before Starting a Business with Your Friend
- Make Sure You’re Compatible as Business Partners
- Set Expectations and Goals
- Get Everything in Writing
- Don’t Let Money Become an Issue
- Separate Work From Play
- Define Roles Based on Each of Your Strengths
- Celebrate Small Victories
- Communicate, Communicate, Communicate
- Learn How to Manage Conflict
- Nurture Your Friendship
- Take Time Apart When Necessary
Make Sure You’re Compatible as Business Partners
The qualities that make people great friends don’t always match the qualities that make people great business partners. Your pal’s tendency to be late, for example, may be endearing when she shows up frazzled to happy hour (20 minutes after she was supposed to), but this habit could be quite frustrating when the same thing happens with an important business meeting.
Amy Creel knows how important it to make an unemotional decision about who you go into business with: She launched Smart Mom LLC with her best friend only to have a huge falling out — to the point that she ended up buying her friend out of the business. “It’s not ‘enough’ to be friends, even best friends,” she says. “You need to know if you are business compatible — sort of like traveling with someone. You can be best buds but horrible travel companions.”
She suggests asking yourself the following: Do you have the same work ethic? The same goals? Have you weathered conflict before? “Dig deep for answers, don’t allow yourself to get caught up in the superficial excitement of starting a business,” she adds. “It’s going to be the toughest road you ever walked so be honest with yourself: Is this someone you can go the distance with?”
Set Expectations and Goals
In addition to taking stock of your compatibility as business partners, you need to make sure you’re both on the same page about what you want to achieve, says Zangara. “Sit down and talk about expectations you have about starting a business together,” she advises. “What are your visions for this business? Are you on the same page?”
For Grace Clapham and Solonia Teodros, co-founders of The Change School, which leads a series of educational retreats in Bali, this meant clarifying goals — and sustainability — upfront. “Establish a timeline for reaching key milestones and review your personal and startup finances to ensure you can sustain yourself over established periods,” says Teodros.
She adds that you may need to take on freelance projects or work part-time while you get the business up and running, so that you can pay your bills, and it’s important to be completely transparent about how much time you’ll have to start your venture, as well as be clear about your respective financial situations.
Get Everything in Writing
While each business is different in terms of whether or not you’ll need to form an LLC or file for a DBA, you will want to get some kind of formal paperwork regarding your partnership in place. “Women tend to avoid confrontation — we don’t want to ‘offend’ by asking our pal to put things in writing,” says Creel. “We often rely on our feelings and, in business, that doesn’t work. You need to protect yourself with a comprehensive written agreement that covers all possible scenarios before you get into business.”
Marianne Gere and Kim Strengari, close pals and owners of acclaimed restaurants in Conshohocken, Pennsylvania, advise meeting with a lawyer who specializes in partnerships, so you can establish contingencies for situations you may not think of on your own “For example, what happens if one partner wants out. How are you going to value your business? What if your partner passes away? The lawyers will write up terms that you both agree upon,” they explained.
Don’t Let Money Become an Issue
Money has a funny way of coming in between even the best of friends if you’re not careful. So, take a tip from Amy Weicker, who is business partners with writer and self-help-guru best friend, Brenden Dilley: “Do not allow your business and personal funds to commingle at any time,” she says. Instead, open a business account that you both have access to. (This will also protect your personal interests in the event that someone sues your business).
“Also agree before beginning your venture that there will be complete transparency with regards to all aspects of the business’ finances,” Weicker adds. “No partner shall at any time remove funds from the business without the knowledge and consent of the other.”
Hiring an accountant or having someone handle your finances also helps depersonalize any money issues and can help keep you on track. “We hired an accountant to handle personal taxes since we’re both responsible for setting aside and paying quarterly personal taxes — local, state and federal,” says Kathy Geller Myers, cofounder of Chatterbox PR with her BFF Heather Zell.
Separate Work From Play
Sharon Fornaciari Maher, co-founder and designer of RJ Square LLC, which makes travel bags for kids, says that she and her business partner/BFF, Maggie, try not to let their two relationships commingle. “Although we started on our kitchen tables, we knew that we had to approach our collaboration ‘as a business,’” she explains. “Yes, friendship brought us together, but shared business knowledge and strengths made us successful, and ensured our friendship would remain.”
Of course, it’s not easy to exclusively talk shop when you’ve got juicy gossip or a cute photo of your kid to share. Heather Carson of start-up focused PR company Onboardly, says she and her business partner (and best friend) Renee Warren make it very clear when they’re making a personal statement or a work one. “We announce ‘friend hat’ or ‘founder hat’ before saying something that could be considered in a grey area,” she says. “It’s how we separate a personal opinion or comment from one that doesn’t really have a place in the business.”
Meredith Silversmith, MA, LMFT, cofounder of Project Bond Inc., an initiative committed to providing adoptive families with valuable services and resources, along with her best friend, social worker Barbara Digangi, says they have set up two iMessage streams — one business, one regular — to keep their conversations focused and organized. (To do this: create a separate Contact with your partner’s email address, delete this email from their other Contact, and start a new iMessage.)
Define Roles Based on Each of Your Strengths
The experts we spoke with agree that choosing a business partner with complementary — not similar — strengths is critical to your success. Amie Hoff, CPT, NASM, who went into business with her close friend Beth (who also happens to be her sister) to launch FitKit.com, believes that having different skill sets helps define your roles and daily tasks. “Beth handles the marketing and sales, distribution, inventory, finances and back end. As a fitness expert, I am more the face of the product and handle all the PR, exercise development and customer interaction,” she explains. “We make a good team. I could never do what she does as well as she can.”
And once you have your tasks decided, let your partner do her job without micromanaging or second-guessing, says Stephanie Allen, cofounder of Dream Dinners, which helps families make homemade meals, with her best friend Tina Kuna. “Trust them completely and allow them to take care of their day-to-day tasks,” she says. “Don’t play in their sandbox.”
To help you both stay on the same page while working within your separate roles, try sharing an Evernote, suggests Gauri Nanda, co-founder of Toymail, which helps working parents connect with their kids, who works with her BFF Audry Hill. “Together we update it so that we can stay on top of each other’s activities.”
Celebrate Small Victories
Starting a business from the ground up is hard work, so be sure to keep your partner (and pal) motivated by spreading positivity. “Create a nurturing and supportive environment in which you’re genuinely happy for each other’s victories,” Myers says. “We’ve both been employed in different environments, so it’s refreshing to have the opportunity where support and kindness flourish on a daily basis.”
Celebrating every small victory also goes long way toward boosting morale, Weicker says. “My partner and I make a point to acknowledge and geek out over every positive book review that comes through,” she explains. “We notify each other of any pictures that readers post with our book. We enthusiastically acknowledge our milestones and achievements — we allow each of these small successes to enthuse and motivate us.”
Communicate, Communicate, Communicate
When in doubt, speak up — whether you’re confused about something your partner did or you’re feeling uneasy about the project you’re tackling. “Don’t let frustrations build because that’s when the tension builds,” Zangara says. “Don’t be passive-aggressive or timid. You both need to be assertive and speak your honest feelings.”
Carson actually has a general rule to avoid miscommunication: “If it takes more than two to three emails back and forth, pick up the phone. It saves confusion, hard feelings and gets things done quicker.”
But remember that your professional relationship is just like any other — it will take work. “The qualities that make up a healthy relationship are the same that make a healthy business partnership,” Silversmith says. “Your relationship should be consistently fine-tuned. Always assess what is working, what isn’t and what can work better.”
Learn How to Manage Conflict
Conflict is inevitable, even between the most compatible and laid-back of business partner best friends. It’s how you handle your disagreements that can make all the difference. “A level of flexibility and openness to trial and error is important when starting up. Consider how important it is for you to have your way on the issue at hand,” Teodros says. “If a firm decision can’t be made immediately, there should be enough trust and leeway between partners to take ownership — and responsibility — for some decisions. In some cases, it may help to divide decision making by department or business area. Not every business decision is critically made unanimously.” (Your founders’ agreement should include a contingency or process for how to proceed when you don’t see eye-to-eye.)
Allen says that, at her company, she and her partner challenge themselves to be curious about the other person’s point of view in order to get through their disagreements. “We ask lots of questions, so we understand where the other person is coming from,” she says. “This keeps us from being reactive about a situation.”
And when it comes to disagreements over mistakes one or the other has made, “Practice forgiveness daily,” Weicker says. “Yes, your partner forgot to click send on the purchase order that was supposed to go out two days ago. Yes, you overslept and missed a super-important conference call. And yes, you both dropped the ball on that PR follow-up that could have netted you thousands in free media exposure. It’s okay. You’ll get through it.” Remember that everyone messes up and try not to place blame — no matter who is at fault. The easiest way to kill a partnership — and a friendship — is to hold a grudge.
Nurture Your Friendship
Don’t let your friendship fall by the wayside once you go into business together, or else you may lose what brought you together in the first place. “One of the most important parts of protecting your friendship is to distinguish between ‘business’ and ‘pleasure,’” Silversmith says. “Set aside time to spend together socially — no work allowed! You may feel like you’re spending a lot of time together, but that doesn’t mean it’s promoting the health of your friendship.”
Nanda agrees and says that she and Hill spend the first several minutes of their workday to connect as friends. (“Whenever we nurture the friendship, the business relationship flourishes,” she explains.) Though, she admits that the line between friend and partner has blurred at times — and it’s only been for the better. “The web design we labored over for so many painful weeks fell into place in one single night when we sat down together with a bottle of mediocre wine,” she says. “Some of our best work has been done while we were just hanging out because that is when we inspire each other.”
Take Time Apart When Necessary
When you’re working with your best friend and seeing her socially, it’s safe to say that you’ll inevitably need a break from each other at some point. “Take time off, and insist that your partner do so as well,” Weicker advises. “Particularly when things are stressful and you’re driving each other nuts, don’t be afraid to tell your partner that you need a day off or a weekend vacation — or even just an extra-long lunch break to go clear your head and relax.”
Down time will keep you sane and help you both avoid getting burnt out, which can hurt you business-wise and emotionally. Taking a breather now and then will ultimately fuel your success.