Have you ever thought about going into business with your best friend?
After all, you’ve known her for years and together you could make millions, right?
Let’s unpack this juicy topic now to see if you’re onto a winning idea, or about to make the biggest mistake of your life and business.
Listen below or download here.
If you’re tempted to go into business with your best friend right now, you’re not alone. In my twenties, I almost started a dating coaching company with my bestie, because we’d meet up for lunch to bitch about our day jobs and dream of doing something different.
It can seem like such a good idea!
You love each other already, and have a ton of fun together – so surely going into business with each other’s a no-brainer. Right?
I hate to break it to you, but most of the time going into business with your best friend is NOT a recipe for success.
Don’t get me wrong, there are a few amazing success stories of best friends who have made it as entrepreneurs together. Think Siegfried & Roy, Three Birds Renovations, Frank Body…even tech giant Microsoft was founded by Bill Gates and his high school pal Paul Allen.
But for every success story, there are far more cautionary tales of friendships lost, bad feeling caused FOREVER by the pressures of business and miscommunication resulting in ongoing heartache.
You have to be very careful of how you set things up to ensure your success, and make sure your friendship lasts beyond the roller coaster of business.
Here’s a checklist for you go through to make sure you’re on the right track:
Be honest with yourself
The first thing to do when you’re trying to decide whether to set up a business with your best friend is to be honest with yourself.
Ask yourself: why do you really want to have a business partner?
Is it because you’re scared to do it alone?
Do you think you’ll only be successful with someone else alongside you?
If this is your main reason to start a business with a friend, you need to snap out of it fast– especially if you DO end up going into business together.
Business requires you to be self-motivated, and yes, it’s nice to have someone holding your hand, but you have to give yourself permission to be successful on your own merits.
Otherwise, your blocks could derail your business, and you want to give it every chance of success!
Decide who will do what
It’s best to do a LOT of talking before going into business together. And not just over cocktails either.
When you talk it over, you’ll need to decide who will do what in the business. Decide on a fair distribution of tasks, and make sure nobody gets all the shitty jobs.
How many hours do you each have available to put into the business? Consider lifestyle factors like family commitments, side gigs and working preferences. I’ve seen lots of business relationships derailed by unrealistic (or unspoken) expectations.
What are your strengths and weaknesses, and do they complement each other?
And if you DO decide to take the plunge, it’s best to be prepared. That’s why the Money Archetypes Quiz I have for you today is something you both should do before you make any business decisions together.
If your energy and ambition match, then you’re probably in a sweet spot to go for it. But if you’re raring to go and your bestie is a slow-and-steady type, you might have a clash of ambition that frustrates you both.
The best thing to do is to talk about it and be incredibly honest about how that will work in a practical sense.
Who will be the “face” of the business?
This can be a hard one.
Most businesses need someone to be the public “face” of them and some people are more behind the scenes (think Macklemore and Ryan Lewis). This works especially well if one person is an introvert and the other an extrovert.
Even if you don’t start out with one person being the visible one, it’ll probably come to it eventually.
If you both want to be the star of the show, then make sure you get enough shared air time. You can appear in promos together, split up interview responsibilities, and then hire staff to whom you can delegate the behind the scenes responsibilities.
If neither of you wants to, then you could do something creative, like creating a cartoon avatar to be the star of your business, like Grammar Girl, which has a cartoon librarian/teacher on most of her posts, or focus on your product, rather than the personalities behind the scenes.
Here’s another example to illustrate this. When you think of Spanx, the creator Sara Blakely comes to mind, but do you know who created Shoes of Prey? I don’t! The shoes are the star.
The worst is if both of you are scared of being visible. That can really put the brakes on your business success, so make sure you sort this one out early.
Then there are the nitty-gritty details to sort out. You need to consider questions like:
- How much money do you need to get started?
- Who is going to put that in?
- What’s your ownership structure?
- How are you going to split the profits?
- How will you decide on purchases that you make for your business?
- Who will own the IP (intellectual property) if you decide to separate?
- What will happen if you make a hundred gazillion dollars together?
- What will happen if you fail spectacularly?
- How will you end if it one person wants to bail out?
Getting all of the “formal” business stuff sorted out with legal contracts and signed agreements is my best advice. It might seem too “unfriendly” to go the legal route but it’s going to serve your business and your friendship down the track.
The more you can hammer out these details to be clear before you start, the more chance you have of keeping the friendship that inspired you to start a business together in the first place.
Are you better off just staying friends?
The final question to consider is this: are you better off just staying friends and not creating a business together?
You can support each other in other ways.
If it’s the creative buzz you’re after, along with a good time, then consider doing workshops together or forming a mastermind to support and build businesses of your own.
Create events and groups that can showcase your talents and where you get to work together without a serious or long-term commitment. My business bestie Victoria Gibson and I co-host retreats in gorgeous locations like Bali or do spa mastermind days, but without the pressure of actually being in business together.
Know your money archetype
One last thing to check before becoming business besties is your money archetype.
When you understand how each other functions when it comes to money you have valuable information to work with when you need to make business spending decisions.
Knowing your money archetype can turn roadblocks into aha moments and is the key to easy decision making in business!
Go and do the quiz, and figure out you and your best friend’s money archetypes, BEFORE you go into business together.
Take the quiz here: LuckyBitch.com/Quiz
My final advice is this: make your decisions carefully, and put whatever you need to in place to make sure you’re both protected if the business folds.
And whatever you end up deciding, remember:
It’s your time, and you’re ready for the next step.
Did you miss last week’s post? Check it out here: How to Heal Your Relationship with Money