Startacus Join Now! /
View Our Toolkit

Starting a business partnership with a friend

Startacus RSS

by Startacus Admin

Going into a business partnership with a friend may seem like a dream situation. However, there are many considerations to be made before business partnershipmaking this kind of commitment. Making a poor decision could lead to not only an unsuccessful business venture, but the end of a friendship.

Microsoft research shows that around half of all partners in new business start-ups are friends before the partnership begins, so clearly this is a highly popular strategy. What are the dangers that face this type of partnership, and how do they make things work?

Making it work
Entering a business partnership is completely different to a friendship, and it is important that you treat the two relationships differently. Disputes and differences of opinion may be rare with a friend, but these scenarios are more likely to emerge in a business environment. How you react to these disputes will define how your partnership works, and if the transition from friendship is likely to be a successful one.

Rather than avoiding each other after your first business dispute, sit down and discuss the issue until you come to a conclusion which is satisfactory to all the parties involved. Once you have resolved this initial disagreement, any future conflicts should become easy to deal with and less likely to damage the business.

Partnership agreements
A partnership agreement is an essential element of a successful partnership, ensuring that many of the most damaging issues which can face a business are dealt with before they become a problem. These agreements determine such important points as the main responsibilities of each partner, and what they are expected to put in to the partnership.

If money is put in to the business during the start-up phase, a partnership agreement can provide guidance on what percentage of profits a partner will receive. For example, if partners contribute different amounts of capital when setting up the business, the partnership agreement could state that profits will be divided to reflect this.

Remember to stay friendsbusiness partnership
Going into business with a friend should not be the end of your friendship. Many unsuccessful business partnerships have failed as a result of ignoring the reason they went into business together in the first place: their friendship. Take the time to do things together just as friends, instead of constantly discussing work when you are together. As well as maintaining your friendship with your partner, this can also help you to unwind from the pressures of running your own business.

Don't be afraid to seek partnership advice

Just because the partnership began with two people does not mean it has to stay that way. Guidance on any aspect of a partnership is available from experienced advisors, while it is highly recommended that you bring in a lawyer or solicitor immediately, avoiding panic when you first have the need for legal advice.

Never forget that working with a friend towards a shared dream is an exciting time, and do your best to see beyond the problems that will come your way. A successful business partnership with a close friend is one of the most rewarding experiences you can have, an outcome which is more than worth fighting for.

Post provided by Ralli Partnership Law

If you like what you see here on Startacus and want to get involved yourself, why not become a member of our growing community by joining for free here!   The Advantages of starting your own business with a Co-Founder...

 

 


Startacus RSS
Business DealsSubmit Your Startup
Win TicketsNetwork and Collaborate
Our Latest Features



Published on: 14th March 2013

If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.


Create an Idea!View Other Ideas, Projects or Startups
Drive with Belron Why not Sign Up?
Create Projects
Edit Projects
Self Interviews
Self Starter of the Year
Product Giveaways
Subscribe to our Newsletter
  • AIB Start-up Academy Summit returns to Belfast! 13th Jan 2017 Northern Ireland startups and entrepreneurs listen up! The AIB Start-up Academy Summit will be back in Belfast and we’ve all the important info you need to bag your free ticket to attend!
  • Newcastle Startup Week Set to Inspire 11th Jan 2017 Newcastle Startup Week - a new festival of entrepreneurship aims to inspire local people to start businesses and attract greater inward investment to the city and wider North East of England region.
  • Drive with Belron Accelerator seeks disruptive Startups 7th Jan 2017 The world’s leading vehicle glass repair and replacement service provider Belron is back on the hunt for innovative startups to joins its ten week accelerator Drive.
  • Startup News UK 2016 Review - November and December 5th Jan 2017 The Donald, Startup programmes and Accelerators, investment news, & the UK's first university campus VC firm, it's all included in part 6 of our UK Startup News Review 2016.
Startacus
Check us out at our Google+ page!