Should You Start A Business With Your Friend Or Relative?

Starting a business with friends was… for some people… the biggest mistake of their lives.

It can truly be catastrophic. Trust me. Been there done that.

For others, however, it turns out to be the most fun and lucrative project they could have EVER dreamed of.

For this reason, I’m probably not going to tell you whether you should do it or not. You’re an adult, and you make your own decisions.

However, I WILL tell you how you can actually make it work, should you decide to take this gigantic leap of faith.

In this article, I’ll show you how to set boundaries, have “the talk”, and what to do when a business partnership with a friend goes wrong.

The Amazing And The Shit Side Of Starting Your Business With a Friend Or Relative

The obviously great thing about working with friends and relatives is that you already trust them. You know they won’t ghost you, and you might actually know them quite deeply.

 There’s no relationship to build from scratch, and you know they won’t stab you in the back…

… or will they? (Dun dun dunnnn!)

No, but honestly, I don’t think that “backstabbing” happens as often as you think. It’s just that those scenarios really stand out, and we’re biased to only notice those.

When shit goes south, it’s more often because of far more predictable downsides. That’s the beauty of it.

One of those disadvantages is that your work relationship was initially built on top of a personal relationship.

You didn’t choose your partner because they’re amazing at what they do, you chose them because you like them (dare I say love them).

You HAVE to understand that conflict is going to happen. You’ll have plenty of disagreements and you just have to get used to it.

The Most Likely Thing that Can Go Wrong in Partnerships with Friends or Relatives

The #1 most common reason co-founders flop is because of perceived inequality.

If your partner feels that they’re contributing more than the other, they’ll slowly build resentment.

And so will you.

I can almost guarantee that you’ll come across this scenario.

You’ll put your heart and soul into the business, and sometimes, you’ll think your co-founder is the most incompetent person you’ve met in your entire life.

(Once again… been there, done that!)

But the worst thing you can do in this situation is to keep quiet about it, not talk, and let the conflict brew.

This style of communication – or actually, not communication – is what leads to passive aggression, resentment, and malicious actions.

If you’ve ever been in a relationship of any kind, you get what I’m talking about.

Sometimes, founders even start sabotaging the project because they feel undervalued and underpaid. I know it sounds crazy, but it’s just basic human psychology.

Everyone thinks “No, that won’t happen to me”, but you have to understand – you’re a human with a brain too. Or at least I think you are.

But don’t worry, even if you have only HALF a brain – my 8D framework to launch your startup is going to massively help you.

It’s a free step-by-step guide to help you launch your startup from start to finish. Whenever you feel confused about your business, just refer back to the framework, and you’ll get instant clarity.

How to Avoid at Least 50% of the Headaches: Set Clear Expectations and Roles From the Start

If you jump into ANY co-founder relationship (especially with a loved one) without having a very long and clear talk about expectations…

Then man… I don’t know what to tell you.

We’re not “playing” founder here. Even if you’re working with your best friend in the entire universe, you have to take this seriously.

I want you to sit down with your co-founder, order a nice kebab, and talk about the following:

• How will we handle disagreements?
• What if we have different financial capabilities?
• How much can each of us contribute to this business?
• What are we going to do when one of us inevitably starts feeling like they’re giving more than the other?
• How will we distribute the profits?
• What happens if one of us wants to leave? How will the business keep running?
• What is more important, the relationship or the business growth?

Let me dive deeper into the last point.

If you love the person you’re starting this business with, your relationship is probably going to be worth more than the business. And that’s perfectly fine.

But communicate that with your co-founder and make sure you’re on the same page.

Just saying this already implements a mitigation strategy for this risk because it increases the likelihood that you will handle this risk more smoothly. It shows your willingness to dialogue and your priorities in maintaining the relationship with this person.

If it’s your sister you’re starting a business with – you probably don’t want to end up like your dad and your uncle fighting over that one plot of land…

However, also ask yourself: “How important is this business for me?” If it’s super important but you don’t want to put it before your relationship… are you sure you want to start it with a loved one?

A business is a lot of work, as is any relationship. You’ll have to grow a lot and be very introspective if you want to make it work.

I don’t think it’s easy, but I think you can make it work. And when you do… you will enjoy every single second of it.

I actually offer a course on building unbreakable co-founder relationships. It might just literally save your life. If you’re interested, feel free to read the sales page.

Are They Actually the Right Business Partner, or Do You Just Love Them Very Much?

If you take a long and hard look at your partner… do you say ehhhh… or do you say WOOOOW?

Very simple, but important question. And you have to trust your gut feeling here.

Do you actually respect their expertise? If they’re responsible for a specific aspect of the project, you have to let them handle it.

They are motivated and invested in the success of the project, just as you are.

But if you feel like you’re much better than them, you’ll end up micromanaging them, and honestly – nobody likes that kind of people.

Also, is your co-founder even as motivated and reliable as you are?

You should feel a natural sense of trust in their ability to make decisions and handle their responsibilities. If someone tends to be indecisive, unmotivated, or disappears when tasks need to be done, they might not be the right fit as a co-founder.

If they’re missing any of these traits, it doesn’t mean you guys can’t be best friends. But trust me, saying “no” is an amazing skill to have.

You don’t want to write the next co-founder horror story.

Again, I’m not trying to tell you that you shouldn’t do business with loved ones. I just want you to look at them with the same objective eye that you’d look at any other partner with.

If they match all your criteria and you wholeheartedly believe you’re not blinded by your love for them – then you have my blessing to start a business with them.

(Yes Mr. Or Ms. Stranger, I know, my blessing is obviously very important to you)

Takeaways

In this article, I told you about my experiences and opinions on starting a business with a friend or relative. Should you, or should you not…

The verdict is… Drum roll…

Yes, absolutely. BUT! And this is a big but – there are lots of things you need to take care of first. Let’s recap what we talked about and how you can make it work:

• The biggest advantage when it comes to building businesses with friends is that you already like them and trust them.
• The downsides are huge and there are many of them… however, they’re often very predictable.
• The number one thing that ruins co-founder relationships is the feeling of perceived inequality. This is when one party feels they’re putting in more work than the other – and still getting the same results.
• If you go about your co-founder relationship like you did with your high school girlfriend/boyfriend/, it won’t work out. You need to communicate a lot. Otherwise, you guys will end up bitter and resentful. A business can’t function like that.
• You’ll have to work on yourself a LOT. You need to become aware of your insecurities and work on them before they end up ruining your business.
• Don’t be a micromanager and learn to trust your co-founder.
• Talk a lot. Talk about everything that could go wrong before starting a business with a loved one.
• What will you do when one gives more than the other? What will you do when one has more financial resources than the other? What happens if one of you wants to leave the biz?
• Is your partner a great business partner or do you just love them? Make sure to look at them as objectively as possible if you want to have a good relationship.