Question: Would you prefer starting a business with a friend or a reliable non-friend contact?
Today’s question can be a lot of fun and stress at the same time if you have ever thought of opening a business with someone. Would you start a business with a friend or a reliable contact who is not yet your friend?
For this question, imagine the business you want to open can be either online or offline. Also imagine that both your friend and your reliable non-friend contact specialize in the same field and can thus be suitable candidates for opening a business with. Last, imagine that the non-friend contact has shown reliability in other business situations, and that you do not know about the business reliability of your close friend; you only know that your friend is your close friend. To help you figure out the answer to this question, I will list below 3 random benefits and downsides of opening a business with either choices.
Opening business with a friend
Opening a business with a friend can have the following 3 random benefits and downsides.
3 random benefits
- More honest and open communication about issues
- More chances of solving business problems as if they were friendship problems
- Fewer chances of being taken advantage of by the other person in the business
3 random downsides
- Friendship can get affected because of the existence of money and personal interest in the business
- Existence of friendship can result in one person not taking the business or business issues seriously
- Friends may not realize if their honest, friendly communication is satisfactory enough for the business to work properly
Opening business with a reliable non-friend contact
Similarly, opening a business with a reliable non-friend contact can have the following 3 random benefits and downsides.
3 random benefits
- More formal and effective communication
- More chances of both parties addressing different issues openly so that they can be satisfied, resulting in more issues coming to the spotlight quickly
- Professional relation with the business partner means both partners will know exactly what to expect, in contrast to the confusion that may result because of a friendship
3 random downsides
- More chances of being taken advantage of if one partner does not feel fully satisfied
- Less chances of talking openly about one’s emotions and feelings about the business
- Fewer chances of solving a business problem on a personal level
A business with a close friend or a reliable non-friend contact?
So, what do you think? Do you feel more comfortable with the idea of opening a business with a friend or with a reliable contact who is not yet your friend?
Please let me know what you think or if you have any questions, thank you. 
[Update: September 9th, 2007 - 2:00 pm PST] For this question, Stacee in the comments for this question asked if the friend was reliable also. I have updated the above question and added the following line in the 2nd paragraph of this article: “Last, imagine that the non-friend contact has shown reliability in other business situations, and that you do not know about the business reliability of your close friend; you only know that your friend is your close friend.” Thank you Stacee. [/ end of update]
:
( September 9th, 2007 at 9:25 am )
Is the friend reliable too, or just the non-friend?
I disagree with the 3 random benefits on the friend side. They could just as easily go in the downsides list. Maybe disagree isn’t the right word. I just see those points as both good or bad; it would really depend on the partners.
1. More honest and open communication about issues
Or less, for fear of hurting friendship/friend’s feelings.
2. More chances of solving business problems as if they were friendship problems
Which could be a good thing or bad thing depending on how both parties deal with friendship problems.
3. Fewer chances of being taken advantage of by the other person in the business
Or more chances. “Come on, we’re best buddies. Don’t you trust me?”
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( September 9th, 2007 at 3:15 pm )
Regarding the downsides you listed to the 3 benefits of starting a business with a friend, those are excellent and logical points. I was thinking of addressing some of them in the benefit points for non-contacts above, and it seems you nailed them very well, better than me. Maybe I should expand the list to 6 points each and incorporate your points also in the downsides in more detail?
1 : I sometimes come across the very first downside you listed almost daily: the possibility hurting the friendship in business or different group situations. Sometimes some people take advantage of one being lenient because of being in a friendship, and can do stuff without thinking about the friendship.
2 : Excellent point! Sometimes some people are already not good at solving friendship issues to begin with, and if they assume they can solve business issues because of their friendship by treating business issues as friendship issues, well, they both better have other solutions too and a lot of patience.
3 : Haha! So true! Also, is this a bit similar to your rental/renting situation?
I have heard that and still hear that so much. I heard it regularly in OC where I was dealing with different kinds of businesses with a few friends, and anytime any problem happened and I started inquiring or taking actions, I would usually, immediately hear something like “Ohh man, don’t you #$%^&*@ trust me?”
Thanks again Stacee. I am updating the question with some more info related to the reliability of the friend as you asked.
Reply & quote this
:
( September 9th, 2007 at 8:41 pm )
Hi, just recieved your email.
I’ll add you to my link exchange section, too.
I’d rather start a business with someone who I don’t have a very personal relationship with. If I were to start a business with a friend, we’d never get anything done or take it very seriously.
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( September 9th, 2007 at 11:15 pm )
Thanks for the response and the comment Jennifer. Thank you also for adding me, even though you are not required to; that is really nice of you.
So in your view, friendship will result in the business not being taken seriously by someone or everyone in the friendship, correct? Do you think such a problem is bigger than the issue of not knowing whether or not a non-business contact can be trustworthy in the long run?
Reply & quote this
:
( September 27th, 2007 at 1:12 pm )
I had a partnership with one of my best friends developing online sites. Unfortunately our partnership dissolved eventually. We were good enough friends that we were able to part business ways amicably…but partnerships are always hard, regardless of who you form it with.
Reply & quote this
:
( September 30th, 2007 at 5:18 am )
I have gone into business with friends before, well actually let me put it another way, I have gone into business with so called friends before. the guy turned out to be a complete two timing asshole. seriously you cant trust people. the problem with going into business with a friend is you let your guard down and you become to trusting often times this can just come back and slap you in the face. At least if you do business with someone you don’t know your on guard.
Reply & quote this
:
( October 10th, 2007 at 10:04 am )
i think it is best to separate business from personal life – some people are very good it that, but it can be difficult sometimes.
Reply & quote this
:
( October 12th, 2007 at 8:40 am )
If you want to keep your friends as friends, and your family friendly, don’t go into business with them. The business relationship will affect the personal, and vice-versa.
Reply & quote this
:
( October 15th, 2007 at 3:21 pm )
i would prefer to go into business with a friend because it is someone you can trust and be open with and you wouldn’t (shouldn’t) have to worry about being stabbed in the back or anything like that. they both have their pros and cons, so its all really a personal choice.
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( October 29th, 2007 at 11:50 am )
Toronto Web Design, thank you for commenting.
That is a good example, specially if your friend was a best friend for you. Do you think the friendship had anything to do with the business results, or did friendship increase/decrease/affect the business directly [meaning if friendship wasn't there, business would have ended in a different manner/result]?
Jagad Guru das, thanks for the comment.
So in your case, you found out that a supposed-friend was not a friend in a business, and you saw their different nature.
I think you have a very good and important point, that in a business with someone you do not know you can be or may be more alert in order to figure out the other person.
Gorilla trades, thanks also for sharing your thoughts on this.
So in your view, friends should not become business partners? Do you think it is possible for friends to start a business and keep it away from their personal and friendship aspect of their lives?
TigerTom, thanks for sharing. Do you think any business or personal relationship can help each other?
I like your comment; it can be read as a famous quote.
AdoptionMoM, thanks for the comment. A very memorable username you have, by the way.
So you are for a different idea than what Gorilla trades or TigerTom [above] think; you think that with starting a business with a friend things have a much better chance of surviving than a stranger.
When you say it is “a personal choice”, do you mean it depends on every situation or that it depends on whether or not we want to do it, or something else?
—-
Sorry for the late response everyone; I really apologize for that. I am catching up now to several comments and replying, and took more time to think of different things and answers to a lot of comments here before responding.
Reply & quote this
:
( October 29th, 2007 at 3:28 pm )
The business relationship will affect the familial one, and vice versa. I would hate to work with my wife or girlfriend. A bad day at the office would mean a bad night at home.
The only exceptions to this would be:
1. Put a family member on the till, if you take cash in your business.
2. Influencing family life will be a lot easier, if you are the big boss: more leverage
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( October 31st, 2007 at 1:44 am )
Hi again TigerTom, and thanks for explaining further. Maybe there should be a post about mixing business and family, as those are some good points. Being the boss brings leverage in many cases indeed, heh.
I wonder whether the relationships of parents and children, who work together in places like grocery stores, is the direct result of their work experience: good work experience = good relationship, and bad work experience = bad relationship.
Reply & quote this
:
( November 1st, 2007 at 4:24 pm )
Hi.
I have started an online business. Its an online-shop (it is german), that is not existing in this form in germany.
I startet the Emo Shop with a friend. I think it has only positive effects, if you start a business with a friend. You share the risk, the work… Isnt it?
Bye,
Nils
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( November 4th, 2007 at 1:10 pm )
Thanks for the comment Zimmermann, I really appreciate it.
Congrats on the business. How long has it been open [I am guessing since 2006]? You do share the risks and the work, indeed. I tried browsing the site a bit and wanted to find some products but I am sure I got lost somewhere in the shirts section, heh.
If you had a choice now, would you prefer opening another business with that friend? Do you think the reason your business is going well is because of the friend you chose to start the business with?
Thanks again.
Reply & quote this
:
( November 8th, 2007 at 1:48 am )
lol mate!.
Very good topic…
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( November 12th, 2007 at 7:19 pm )
Sawai, thanks.
How about you: would you open a business with a friend? That reminds me about something…
Reply & quote this
:
( November 13th, 2007 at 11:24 am )
I know what you are talking about…
I wouldnt mind starting one at all with you! But if it were somebody else, I will be forced to think
Cheers!
Reply & quote this
Find/Add me at these places: Flickr | MySpace | Twitter :
( February 4th, 2008 at 10:01 pm )
Thanks for sharing Sawai. How is your site coming along? Long time no update.
[sorry for the late response, am getting back to a lot of things including comments and responses]
Reply & quote this
:
( July 30th, 2008 at 8:35 am )
When entering into a business relationship with another person you need to consider the exit strategy. I would strongly recommend getting a partnership agreement drafted for any partnership or a shareholder agreement for members of a limited company. This should include clauses on what to do if one partner wishes to leave. There must be an amicable way of resolving any separation between business partners or the business as an entity may suffer.
Reply & quote this
:
( August 1st, 2008 at 12:14 am )
Well, reading this post after having a littlle bit of experience and burning my hands, I would any day prefer starting business with a reliable person who is not a friend over starting business with a friend.
I would also like to add that it does not matter if somebody is a friend or not. It only matters if a person is reliable. Things will always work out till you make sure emotions stay out.
This is just my opinion.
Reply & quote this
:
( August 15th, 2008 at 12:44 am )
i prefer to do business with no friends, it’s better
Reply & quote this
Please leave a comment below, thank you. You will be able to edit your posted comment for up to one hour (60 minutes).