Have you considered co-founding a new business with a family member or friend? If so, you’re in good company –Fox Business reporter Susan Shreter reports that about half of today’s startups are co-founded among friends, family members or spouses.
Going into business with a friend or family member? It certainly makes sense that one would want to pursue their most ambitious goals with people they trust. But is doing so good or bad for the relationship you have with your co-founder?
When working with friends, expectations of loyalty and understanding are higher than is common among everyday work colleagues. And when friends let us down, resentments can linger and cause a deep divide in both work relationship and personal relationships.
Here are five ways startup misunderstandings can spiral out of control and potentially end friendships, according to Fox Business.
#1: Unmet Expectations. The typical startup business will take a lot more time and money to become profitable than anyone ever expects.
#2: Work Style Conflicts. Even though friends get along great when hanging out at the bar, this compatibility may not resonate in the office environment.
#3: Business Strategy Disagreements. New startup partners tend to be well aligned to the grander goals of an organization, but rarely have worked through the details of how to achieve these goals.
#4: Spending Conflicts. One of the most common areas of disagreement is spending authority and budget priorities.
#5: No Way Out. What happens when one partner wants to sell out, quit or reduce involvement in the business?
A recent Forbes article, titled “Co-Founding With a Friend - - Without Decimating a Friendship,” shares a few words of wisdom from successful businesses founded by friends. One startup says “when making decisions, we make the conscious decision to not be disrespectful because at the end of the day, we want to stay friends.” Another startup recognizes the importance of keeping work and personal lives separate.
In order to avoid any misunderstandings that could potentially end the business or the friendship, it is important to discuss all issues that might interfere with productive business building.
References: Fox Business (June 13, 2011) “Why Co-Founding a Business Can Decimate Friendships”
Forbes (December 12, 2012) “Co-Founding With a Friend – Without Decimating a Friendship”