Building A Business With A Friend – Keys to a Fulfilling Venture

 

Starting a business or project with a close friend is a subject that often elicits cautionary advice, especially from family members in Nigeria. Despite having complementing skills, shared passions, and a strong personal connection, many people are hesitant to pursue a business partnership with their friends. This is due to concerns about the potential impact on the friendship, the possibility of differing goals and expectations, unequal dedication to the venture, and disparate skills and strengths. At the heart of these concerns is the fear that disagreements over money and financial decisions could strain or even sever the friendship. As a result, many choose to preserve the friendship instead of testing it through a business partnership.

I have a mix of experiences with running businesses and doing projects with friends, some of which ended due to money issues. Despite this, I am not completely deterred from exploring this option in the future. To me, friendship is invaluable, as I do not make friends easily and value the emotional support, personal growth, joy, laughter, and sense of belonging that they bring whenever I make friends.

Drawing on my 20 years of experience, this guide will delve into the challenges of starting a business with a friend and offer practical tips for success. Whether you're starting from scratch or already well underway, this guide will assist you in establishing a successful and thriving business partnership with your friend. It can also shed light on issues that may have impacted your past collaborations.

Signing a Memorandum of Understanding (MOU) is a crucial initial step in starting a business or project with your friend or any partner. An MOU is a formal agreement that outlines the partnership's terms and conditions, including each partner's roles and responsibilities, profit division, and decision-making process. Having a written agreement helps to prevent misunderstandings and provides a clear understanding of expectations. In the event of a dispute, the MOU serves as a reference point and can save time and money by providing a clear understanding of what was agreed upon at the start of the partnership. As the business progresses, if there is a need to, this document can be amended to address current issues in your partnership.

The process of creating an MOU can be delicate and should not be taken lightly. This is where early signs of conflict may arise, and it's crucial that these issues are addressed and resolved satisfactorily. Trusting your friend is important, but relying solely on trust can be risky. When money starts flowing or tensions arise, having a well-drafted MOU can protect both the business and the friendship.

Some benefits of starting a business with a friend includes shared vision. A shared vision and values can foster a harmonious working relationship and minimize conflicts. Trust in each other's abilities, money management, and loyalty can simplify decision-making and navigating difficult situations. By dividing workload according to agreed parameters outlined in a Memorandum of Understanding (MOU), stress levels can be reduced, and productivity improved. Having a friend as a business partner is a major benefit that provides a supportive environment to weather challenges and celebrate successes.

Let us look at the some challenges and how to address them. Conflict; conflict can pose a major challenge in partnerships with friends and often lead to the fear of compromising the friendship. However, it's essential to have a conflict resolution strategy in place, which can be outlined in the Memorandum of Understanding (MOU). By clearly defining roles, responsibilities and establishing a decision-making process that works for both partners, conflicts can be prevented. Therefore, signing an MOU prior to starting the business is a necessary step to ensure a smooth partnership.

Varied work approaches  - Every individual has their own unique working style, which can cause friction when it differs from your partner's. Before embarking on a partnership, you may have only interacted during weekends or holidays, so these differences were never an issue. However, working together can bring these differences to light and exacerbate conflicts. It's important to be mindful of each other's strengths and weaknesses, and to approach the situation without judgment. For example, some individuals may work best in the morning, while others perform better during the day. The key is to find a way to work together and achieve deadlines effectively.

Imbalanced Workloads - A disproportionate distribution of responsibilities can lead to frustration and exhaustion in a partnership with a friend, especially if the MOU does not clearly outline each partner's role. It's crucial to consistently reassess the workload and make adjustments to ensure a fair distribution of tasks and prevent burnout of either one.

Preserving Personal Ties - When partnerships with friends don't go as planned, personal relationships can be put in jeopardy. It's crucial to maintain open communication, even in moments of disagreement, to avoid damaging the friendship. Being willing to reconcile and work through issues together can improve communication between partners, allowing for the expression of thoughts and feelings. This leads to better problem-solving and decision-making, potentially saving the friendship even if the business is not successful.

Finally, it can be a fantastic opportunity when you start a business or project with a friend but it's important to be aware of the potential pitfalls and to have a plan in place to deal with them. If you have clear goals, open communication, and a commitment to making the business a success, you and your friend can overcome any challenges and build a thriving business together. Remember, starting a business with a friend is a unique experience, and with the right approach, it can be one of the most rewarding experiences of your life. So, take the time to plan and prepare, and enjoy the journey as you build a successful business together.