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Should You Start a Business with Your Friend

If you’ve been thinking of how to start a business, the idea of starting it with someone you trust and care about might sound like a great idea. Besides, who else knows you like your best friend? Many friends start businesses and have a great time doing it. They may even become successful.

On the other hand, you hear of best friends who start companies and end up having a massive fight over finances, who owns what and the success and ownership of the business itself. The issues can be disastrous for a newly started business.

So, should you start a business with your friend? We’ll go over the pros and cons of each side of it, and you can make that decision for yourself.

Pro: Working Will Be More Fun

Working with your best friend might sound like a dream, and for some, it is. Going to work each day to see a familiar face of someone you care about is a lot better than going to work and seeing that coworker you despise.

Many businesses started between two friends or a friend group that have been successful, and we have proof of that. However, some haven’t. So how do you know that you and your friend are going to get along when it comes to a business setting?

The only way to know is to try. Making plans and developing strategies with a buddy can be a really chill and fun hangout instead of a tedious and stressful board meeting. If you and your friend enjoy chatting over beers, you can get a beer and hang out while talking about your next marketing efforts.

Working with friends is certainly not a horrible idea. However, you might want to learn a little more about friendship by checking out BetterHelp’s advice section here: https://www.betterhelp.com/advice/friendship/.

Con: You May Find Hidden Disagreements

One thing is sure in friendships. We can’t always agree on everything. This fact is true in any business relationship. However, starting a business alone doesn’t come with the same risks as starting a business with someone else.

After all, you have to share profits, plan together, run your ideas through someone else, and even deal with the losses together. If one person in the pair wants to design a new line of pink clothing and the other wants to go for a sunglasses line, there’s not going to be an easy way to resolve the conflict if neither one of you is willing to budge.

Since many people who start businesses are “go-getter” types of people, these personalities can crash together easily. You’ll want to really discuss your plans before even signing any loans or contracts with someone else. Don’t get yourself into a legal situation with someone who will try to argue with you on every idea you have.

Find some common ground, draft some plans, and then decide where to go from there.

Pro: Sharing Profits

If your business is successful, you and your friend may find a ton of happiness in your friendship by sharing the profits you’ve gained. For a company that is bringing in a couple of millions of dollars each year, you can both bring home the dough for your families and even enjoy it together.

You can plan employee parties, celebration events, conferences, and more. Plus, you get to do it with someone you really care about. Seeing your best friend succeed along with you is the ultimate prize of starting a business.

This step is especially valuable if both you and your friend came from a place of poverty or struggle. Seeing each other succeed can feel like you finally made a name for your families and brought yourselves out of a dark place.

The only downside to this is that it may feel like you’re not making as much as you could in the beginning. If you want all the money for yourself, it may feel hard for you to share it with someone else. Ultimately, whether or not this is a pro is up to you.

Con: Financial Arguments

As mentioned in the previous section, finances can get you into a bit of trouble in your friendships, especially at first. If you or your friend had a certain financial expectation that isn’t being met in real-time, there might be arguments that erupt.

Money can even ruin friendships. You may find yourselves coming to a place where you forget why you started the business in the first place. Instead of enjoying your time with your friend, you’re vying over who can get the best cut of the profits, who designed what first, and why you deserve more money than your friend. You may even claim that the business was yours, even though you both started it.

These arguments can and do cause businesses to go bankrupt. When you’re not working with a friend, you don’t take arguments personally, and you can keep your friendships in your life separate from your work relationships. If you’re the sole owner of a business, you can keep employees on the team that you like and fire people who aren’t pulling their weight.

With an equal business partner, neither one of you can fire each other. If things go wrong and you don’t want to be friends anymore, you’re stuck with them.

Read More: Best Tips to Consider When Starting a New Business

Conclusion

It may not be a great idea to start a business with a friend. However, there’s always an exception to every rule. If you and your friend have been inseparable since birth, planning your business for years, and are ready to take on the enormous financial and physical commitment of owning a business together, then all power to you.

It’s ultimately up to you and your friend what works best. Just take our words of caution, as we’ve seen many friendships fail under the pressure of financial gain. We’ve also seen many succeed. So go out there, get planning, and good luck with your business ventures!

FinanceGABhttps://www.financegab.com/
Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.

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