When You Pick A Friend As A Business Partner
When an entrepreneur decides to bring on a business partner in a business endeavor, who they pick as a business partner is an incredibly impactful decision. Sometimes, a person will decide to form a business partnership with one of their friends.
Having a friend as a business partner can have some real benefits. Working with someone you like can potentially make work more enjoyable. Also, people generally know a great deal about their friends, and having an accurate and clear understanding of a business partner's strengths and weaknesses can be very helpful when working with them.
However, there can also be drawbacks to being a business partner with a friend. For one, if problems arise in connection to the business relationship, it could not only affect the business, but also potentially the friendship.
Thus, dispute prevention can be particularly important when working with a friend on a business endeavor. Examples of things that may help with heading off disputes between friends who are business partners are:
- Having an agreement that sets clear rules regarding the nature of the business relationship.
- Clearly laying out how business decisions will be made (such as which decisions are which person's responsibility).
- Having honest discussions with each other about business goals and values.
- Taking efforts to keep business discussions/activities and friendship-related conversations/activities separate.
When disputes end up arising between business partners who are friends, it can be important to think about how the different ways of addressing the dispute could impact the business relationship and the friendship. Some resolution methods may be more likely than others to help preserve the relationship and friendship. Experienced business law attorneys understand that disputes between business partners who are also friends can be especially delicate matters, and can give business owners in such disputes guidance that takes this delicateness into account.
Source: Money, "How to Launch a Business with Friends — and Stay Friends," Sarah Max, March 11, 2016