How To Start A Business With A Friend
Being your boss and starting your own business is a tough task. Adding a co-founder who is also your friend to the mix makes it even harder. The way our mindset works is that if we are compatible on a normal level with the same thought process and the same mind for business, then we can make a smooth and perfect transition into owning and running a business. That being said, starting a business is a whole other ball game. It can test your friendship on levels you never imagined. You can clash on major things such as how to approach start-up funding India and the angel investors, hiring of employees, start-up consultants, marketing executives, business plan consultants, etc. With this in mind, transparency is key to a fruitful partnership. As a business start-up mentor, I know a few tricks of the trade that can help you breach that gap you may face as friends working together. Let’s see how that can be done.
Compatibility is key.
It’s important to distinguish and set established rules between friends and business partners. Certain qualities that make good friends may not necessarily translate into good business partners. It’s important to understand and establish the way you work. Can you work together to solve problems? Is one dominant over the other? Do your work ethics match? Are you as partners open to criticism and change? Can you adapt and weather conflict together?
These are all deep questions that must be answered by you. It’s important to think this decision through before jumping into business with a friend. On the outside, it looks peachy and fun but it requires hard work and a strong mental ability to work with one another. So make sure you are compatible with each other.
The tough conversations must be had.
Conversations around the head of departments, who is the CEO, etc. are the tough conversations that must be had. Taking aside your ego, work to understand who will best fit into these roles and responsibilities. Understand your partner’s strengths and weaknesses. Speak openly and transparently about subjects that can be potentially triggering or touchy such as salaries, equity, title, etc. It’s better to have the conversations as soon as possible rather than pushing it for later. This will help prevent any uncomfortable conversations or exchanges later.
If you agree on something, put it on paper.
It’s important to draw up business plans with the help of a business plan consultant, written agreements, etc. Putting it on paper helps separate your working relationship from your friendship. It also helps in establishing boundaries and this helps in the long run. Since you’re running a business you mustn’t get feelings involved in the mix. Written agreements are your best friend.
Perspective is everything
Since you’re starting a business with a friend, you are bound to be of the same cultural background with similar upbringings etc. As such you may not see some opportunities because your perspectives are very similar. With this, it becomes important to hire professionals who come from different backgrounds as they help cover some blind spots you may have. If you are trying to reach your target audience you must make sure you do it as efficiently and smartly as possible.
To Sum Up
With all this, just know that starting a business with your friend may not be all that bad. Creating and growing something from scratch takes time and effort. You are bound to make some mistakes along the way. However, don’t let those mistakes define you or your relationship with your business partner/friend. Make the best of the situation and learn from it.
About Devansh Lakhani
Director of Lakhani Financial Services, and a Chartered Accountant, he helps in start-ups funding India from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. Being a business plan consultant he has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments.
Check out a blog about Lakhani Financial Services written by Karo Startup here.