Starting a business with someone you know well and like spending time with can work out brilliantly, as long as you put measures in place to ensure you’re both happy and are able to maintain your friendship, no matter what happens.
So, here are my top tips for starting a business with a friend:
Make sure that your business’s structure is secure. Engage a solicitor in checking your contracts and making sure both of your interests are protected, in the event of things not working out.
Discuss your long term aims and objectives, to ensure that they are in line with each other. For example, if one of you is looking for a sideline or part-time venture, while the other wants to invest all their time to grow the business, it can’t work for you both.
Agree on your company values as, in my opinion, this is the foundation for building a successful business. As your business grows, you will need to ensure you communicate these values to any new franchisees or employees that come on board, so it’s essential that these are confirmed from the beginning.
Make sure you agree on exactly how the company will be run and that any computer systems you implement can be accessed and updated easily. This will mean you can both be clear and informed on every aspect of the business, especially when it comes to sales, marketing, finance and management.
Define your individual roles and responsibilities from the start. When good friends work together, it’s very easy to take a collaborative approach instinctively and want to help each other out.
However, it is essential that you both decide which areas of the business you’re both responsible for, so that you don’t duplicate work or find your roles start to overlap. If you allocate responsibilities based on your own strengths and weaknesses and make sure you stick to them, things will flow a lot more easily.
Make sure you communicate frequently and honestly about day-to-day operations. This is another essential component of running any successful business with a friend, as you will both always be aware of what’s happening in all areas of the business at all times.
Providing each other with regular updates and speaking out if something is bothering you is crucial. We are often reluctant to be confrontational with friends or be the bearer of bad news, but honesty is the best policy and, for your business to run smoothly, you will both need to prioritise your business relationship.
Discuss money upfront, which may feel awkward, but will help to avoid disagreements later. Confirm how much each of you will be contributing to the start-up costs required and how that affects the balance of shares in the business.
Also, you must agree on how much money each of you will be taking from the business and how any remaining money will be spent to ensure your business’s growth.
Starting a business with a friend is always a big decision but, if you have the right structure in place from the outset, it could be the ideal confidence booster you both need for a positive outcome that will help you along the way to becoming successful entrepreneurs.
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