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5 Dos and Don’ts When Starting a Business With a Friend

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Friends are an essential part of our lives. They’re the people who help us overcome hardships and achieve our goals during childhood, youth, and adulthood. But can you start a business with a friend and be successful? We all know how friendships work. You get used to and take liberties with each other. There’s almost no end to the number of times you’ll “let it slide” when your friend makes a mistake.

Is any of that good for business? As you may know, starting a business requires you to be organized, creative, and focused. You need to know all the risks and be prepared to make some sacrifices along the way. Your potential customers need you to offer a better product or service than your competitors.

So, you may be wondering whether your friend can really be a good business partner. The truth is, it can either work or not. If you want to successfully start a business with a friend, here are some important dos and don’ts to keep in mind:

1. Assess each other’s skills and be honest

It could be that your friend said they’re skilled in something. And maybe you saw them do the thing and liked it. But have you thought about what other people think? It’s easy to oversee faults in your friend’s work because of the connection you have. You want to be loyal to them. And so, you might ignore any flaws you spot hoping they’ll do better next time.

But it can be quite hard to do better when you don’t know the areas to improve on. So, it’s best to be straightforward with your friends when assessing their skills. You could even involve a third party to help judge your competency and compatibility as business partners.

2. Clearly understand each other’s roles

It can be quite stressful when either of you has to do a bunch of things for the business. The best approach is when each one has been assigned specific roles. It’s good to base the responsibilities on your strengths and skills. And that’s why you need a friend with different but essential skills when starting a specific business.

When you’ve established who will be doing what, leave them to it. Don’t keep observing and trying to improve what your business partner does. That’s unless they really need your help. You can then update each other of your progress later on. You could use the necessary collaboration and information-sharing tools for this purpose or catch up from time to time.

“A business absolutely devoted to service will have one worry about profits. They will be embarrassingly large.” – Henry Ford

3. Record everything

Business can have conflicts related to investments, roles, and other things. If you don’t put it in writing, it becomes hard to know who is right. It could be that one of you invested more money than the other. Or, one of you has a superior role in decision making. When either of you makes a mistake, you can easily go back to the records and resolve the issue in no time.

Aside from who does what or invested which amount of money, you need an actual business plan written. It includes your vision of where you want your business to be in a particular number of years plus the steps to get there. It’s a good idea to involve a lawyer who specializes in business matters. They’ll help you prepare the required documents to successfully run a business as partners.

4. Don’t bring play into work

It isn’t bad to have a bit of fun while at work. In fact, being happy is necessary for enhanced productivity. But the idea is not to overdo it. You could establish a protocol where certain things can’t be done at work. If anyone breaks the rules, they have to undergo some sort of workplace punishment. This way there’ll be less instances of being late, absenteeism, low-quality work, and other undesirable behaviors.

Better yet, you could have a reward strategy where someone gets monetary or other rewards for their good work. This kind of motivation works well most of the time. You and your friend/business partner will work hard to get such benefits.

5. Don’t let business affect your friendship

While we’ve been exploring what you need to do to have a successful business with a friend, it’s essential to maintain your friendship. Don’t be too focused on business that you barely have time to be there for each other.

You need hours or days off to share personal matters that you’ve been avoiding because it was business time. Joke, laugh, and do anything else you used to engage in as friends.

And because the failure of a business isn’t uncommon, you’ll still have your friendship intact in case it happens. You could even start a new business without worries while fixing the missteps you previously made.

It’s possible to start a successful business with your friend as a partner. Many brands, big and small, have done it. You can do it too if you follow the best practices of having a friend for a business partner. In short, separate friendship from business but don’t forget to water the former too.

Mike Stuzzi is an online entrepreneur and blogger who helps people around the world make extra money and manage their finances effectively. He has started a number of successful online businesses and intends to help his readers achieve the same. He believes there’s a lot anyone can learn about money. Check out his blog themoneygalileo.com for tips and resources to become money-minded, boost your income, and practice proper money management. Connect with Mike here.

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Success Advice

Why One-Size-Fits-All Leadership Will Always Fail (and What Works Instead)

The surprising truth about leadership styles that can make or break your team’s success.

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Why one-size-fits-all leadership doesn’t work
Image Credit: Midjourney

Leadership has always been as much about people as it is about performance. Ken Blanchard, in his influential book, “The One Minute Manager”, put it simply: different strokes for different folks. (more…)

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What Every New CEO Must Do in Their First 100 Days (or Risk Failure)

Your first 100 days as CEO could define your entire legacy, here’s how to make every move count

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The Leadership Shift Every Company Needs in 2025

Struggling to keep your team engaged? Here’s how leaders can turn frustrated employees into loyal advocates.

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Bridging the gap between employees and employers
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In workplaces around the world, there’s a growing gap between employers and employees and between superiors and their teams. It’s a common refrain: “People don’t leave companies, they leave bad bosses.”

While there are, of course, cases where management could do better, this isn’t just a “bad boss” problem. The relationship between leaders and employees is complex. Instead of assigning blame, we should explore practical solutions to build stronger, healthier workplaces where everyone thrives.

Why This Gap Exists

Every workplace needs someone to guide, supervise, and provide feedback. That’s essential for productivity and performance. But because there are usually far more employees than managers, dissatisfaction, fair or not, spreads quickly.

What if, instead of focusing on blame, we focused on building trust, empathy, and communication? This is where modern leadership and human-centered management can make a difference.

Tools and Techniques to Bridge the Gap

Here are proven strategies leaders and employees can use to foster stronger relationships and create a workplace where people actually want to stay.

1. Practice Mutual Empathy

Both managers and employees need to recognize they are ultimately on the same team. Leaders have to balance people and performance, and often face intense pressure to hit targets. Employees who understand this reality are more likely to cooperate and problem-solve collaboratively.

2. Maintain Professional Boundaries

Superiors should separate personal issues from professional decision-making. Consistency, fairness, and integrity build trust, and trust is the foundation of a motivated team.

3. Follow the Golden Rule

Treat people how you would like to be treated. This simple principle encourages compassion and respect, two qualities every effective leader must demonstrate.

4. Avoid Micromanagement

Micromanaging stifles creativity and damages morale. Great leaders see themselves as partners, not just bosses, and treat their teams as collaborators working toward a shared goal.

5. Empower Employees to Grow

Empowerment means giving employees responsibility that matches their capacity, and then trusting them to deliver. Encourage them to take calculated risks, learn from mistakes, and problem-solve independently. If something goes wrong, turn it into a learning opportunity, not a reprimand.

6. Communicate in All Directions

Communication shouldn’t just be top-down. Invite feedback, create open channels for suggestions, and genuinely listen to what your people have to say. Healthy upward communication closes gaps before they become conflicts.

7. Overcome Insecurities

Many leaders secretly fear being outshone by younger, more tech-savvy employees. Instead of resisting, embrace the chance to learn from them. Humility earns respect and helps the team innovate faster.

8. Invest in Coaching and Mentorship

True leaders grow other leaders. Provide mentorship, career guidance, and stretch opportunities so employees can develop new skills. Leadership is learned through experience, but guided experience is even more powerful.

9. Eliminate Favoritism

Avoid cliques and office politics. Decisions should be based on facts and fairness, not gossip. Objective, transparent decision-making builds credibility.

10. Recognize Efforts Promptly

Recognition often matters more than rewards. Publicly appreciate employees’ contributions and do so consistently and fairly. A timely “thank you” can be more motivating than a quarterly bonus.

11. Conduct Thoughtful Exit Interviews

When employees leave, treat it as an opportunity to learn. Keep interviews confidential and use the insights to improve management practices and culture.

12. Provide Leadership Development

Train managers to lead, not just supervise. Leadership development programs help shift mindsets from “command and control” to “coach and empower.” This transformation has a direct impact on morale and retention.

13. Adopt Soft Leadership Principles

Today’s workforce, largely millennials and Gen Z, value collaboration over hierarchy. Soft leadership focuses on partnership, mutual respect, and shared purpose, rather than rigid top-down control.

The Bigger Picture: HR’s Role

Mercer’s global research highlights five key priorities for organizations:

  • Build diverse talent pipelines

  • Embrace flexible work models

  • Design compelling career paths

  • Simplify HR processes

  • Redefine the value HR brings

The challenge? Employers and employees often view these priorities differently. Bridging that perception gap is just as important as bridging the relational gap between leaders and staff.

Treat Employees Like Associates, Not Just Staff

When you treat employees like partners, they bring their best selves to work. HR leaders must develop strategies to keep talent engaged, empowered, and prepared for the future.

Organizational success starts with people, always. Build the relationship with your team first, and the results will follow.

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Entrepreneurs

What Makes an Entrepreneurial Leader? Traits of the World’s Best Innovators

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