Starting a business with your best friend can seem like the ideal setup. You already trust each other, know how the other person thinks and probably have a good idea of their strengths, weaknesses and working style.
But friendship and business compatibility are not always the same thing.
Once money, workload, employees and difficult decisions enter the picture, assumptions that were harmless in a friendship can become much more serious. Differences over ambition, working hours, pay or responsibilities can create resentment surprisingly quickly if they have never been discussed properly.
Business and leadership coach Ben Robins says friends considering becoming co-founders should have a number of honest conversations before launching a company together.
“A strong friendship doesn’t automatically mean you’ll make compatible co-founders.”
Robins says the aim is not to eliminate every future disagreement, but to make sure both people understand what the other expects before the business becomes more complicated.
Agree what success actually means
Most people starting a company together will say they want it to be successful, but that can hide very different ambitions.
One founder may want to build a £100 million business, employ a large team and eventually sell the company. The other may be perfectly happy with a much smaller operation that provides a good income and more freedom.
Neither approach is necessarily better, but the difference matters because the two founders could end up building towards completely different futures.
Robins says business partners should discuss how large they want the company to become, whether they want rapid growth or a more manageable operation and whether they ultimately hope to sell.
Lifestyle is equally important. One person may be comfortable working long hours for several years, while the other may be hoping the business will eventually allow them to work fewer days or spend more time abroad.
“You don’t have to want exactly the same life, but you should know what success looks like to the other person before you start chasing it together.”
It is also worth discussing what neither person is prepared to sacrifice. If one founder is willing to make the business the centre of their life and the other wants clear boundaries around evenings, weekends and family time, that difference is much easier to manage when it is understood from the beginning.
Put the obvious expectations into words
Close friends can be particularly vulnerable to making assumptions because they feel they already know each other well.
One founder may assume the other will naturally take responsibility for sales, while their partner believes they will share it. One may expect profits to be reinvested into the company, while the other assumes they will begin taking money out as soon as possible.
Business and leadership coach Ben Robins says friends planning to start a company together should discuss their ambitions, responsibilities, workloads and exit plans before becoming co-founders.
Working hours can create the same problem. A founder may see evenings and weekends as an unavoidable part of launching a company, without realising their business partner has never agreed to that expectation.
Robins recommends discussing responsibilities in far more detail than simply assigning job titles.
Calling one person CEO and the other COO does not automatically establish who manages staff, handles key clients, oversees finances or takes responsibility for bringing in new business.
“The aim is to know exactly what you’re expecting from each other instead of relying on ‘I thought you were going to do that’ when the pressure is on.”
Founders should also talk about holidays, salaries, outside projects and what happens during periods when the business does not have enough money to pay both people what they expected.
It can also be useful to identify which parts of the company each founder actually wants to run, rather than dividing responsibilities purely according to titles.
Decide what happens if the workload stops being equal
A 50/50 partnership can feel completely fair at the beginning, but contribution often changes as a business grows.
One founder may eventually bring in most of the new business, become the public face of the company or take responsibility for a much larger share of the day-to-day work. The other may decide they want to reduce their hours or focus on a narrower part of the company.
That does not automatically mean the partnership has failed, but it can become a serious source of tension if one person feels they are carrying considerably more responsibility while everything else remains equal.
Robins says founders should discuss in advance how they would respond if the balance changed.
Would it ever be appropriate for one founder to earn more? Could responsibilities be renegotiated? What happens if one person wants to reduce their working hours or step back from part of the business?
He also recommends asking each other one particularly useful question: what would make you resent me?
“The answer could be working fewer hours, taking more holiday, spending company money or getting more of the public credit.”
Those issues can sound minor when the business is new, but they can become much more significant once money, recognition and workload are involved.
Discussing them early gives both people a clearer understanding of where potential pressure points might be.
Work out how you will disagree
A strong friendship does not necessarily make difficult business conversations easier.
Friends may be comfortable giving each other personal advice, but telling a co-founder they are not performing well, questioning an important decision or overruling them in front of employees can feel very different.
Some business partners avoid those conversations because they are worried about damaging the friendship. That can allow problems to continue for far longer than they should.
The opposite can also happen, with disagreements about budgets, performance or staffing following both people outside work and beginning to affect the friendship itself.
Robins says founders should agree how concerns will be raised and how decisions will be made before they are under pressure.
That includes identifying which areas each person controls independently, which decisions need agreement from both founders and what happens when neither person is willing to change their position.
“Neither of you should have to choose between protecting the company and protecting the friendship.”
In some businesses, the founder responsible for a particular area may have the final say. In others, both people may agree to involve a trusted adviser or board member if they reach a deadlock.
It can also help to set boundaries around when business discussions stop, particularly if the founders socialise together outside work.
Discuss the possibility that one of you may eventually leave
Talking about an exit before a company has even launched can feel unnecessarily negative, but Robins says it is one of the most important conversations founders can have.
When friends build a business together, one person leaving can feel much more personal than an ordinary commercial decision.
The person staying may feel abandoned, while the founder who wants to leave may feel guilty or trapped because they worry that stepping away from the company will also end the friendship.
Robins recommends agreeing the basic principles of an exit while the relationship is still positive.
That can include how much notice each founder would be expected to give, how their shares would be valued and whether the remaining founder would have the first opportunity to buy them.
The discussion should also cover whether the person leaving would retain any involvement in the business.
“Changing or ending the business partnership doesn’t have to mean rejecting the friendship.”
An exit does not always need to mean leaving completely. One founder may eventually want fewer responsibilities, a different role or a new financial arrangement.
Allowing the partnership to change can sometimes prevent a situation where somebody feels their only options are to remain unhappy or walk away entirely.
Have the uncomfortable conversations before you need them
Starting a company with a close friend can work extremely well, but familiarity should not be treated as a substitute for clear agreements.
Business partnerships introduce questions that most friendships never need to answer, from who gets paid what to who has the final say when both people strongly disagree.
Robins says the most useful conversations are often the ones founders are tempted to postpone because everything currently feels positive.
Agreeing ambitions, responsibilities, expectations and exit plans does not mean expecting the partnership to fail. It gives both people a clearer idea of what they are actually agreeing to.
And if the company does become successful, those conversations can help make sure the friendship survives the pressure that comes with it.
