Why You Should (or Shouldn’t) Go Into Business With a Friend

go into business with a friend

You’ve heard it before: Don’t mix business with pleasure. This could certainly be the case if you dabble with the idea of going into business with a friend. If you’re not careful, the relationship can turn sour very quickly and hurt your business in the process. On the other hand, a close, trustworthy dynamic could result in tremendous benefits for a business.

Though there is no general right or wrong answer, we asked 13 entrepreneurs from the Young Entrepreneur Council (YEC) to share their insights:

“Should you go into business with a friend? Explain why (or why not).”

Here’s what YEC community members had to say:

1. It’s a Personal Decision

“I’ve gone into business with friends before and unfortunately for me, it never ended well. It can be so tempting to go into business with someone you know and trust, but it’s tough to manage a friendship when business will need to be a priority. If you’re going to do it, get a solid partnership agreement and talk through as much of the potentially awkward stuff ahead of time.” ~ Darrah Brustein, Network Under 40 / Finance Whiz Kids 

2. Yes, Best Friends Are the Best Partners

“I’m on my second business that I’ve started with my best friend (the first is still crushing it). I wouldn’t have it any other way. If you look at it from an efficiency point of view, best friends communicate clearly with almost 100 percent understanding. That’s rare and super efficient. Also, emotionally, you’re spending time with someone you don’t get tired of. Best friends make great partners.” ~ Brennan White, Cortex

3. Absolutely, It’s Rewarding to Share the Experience

“You’re going to be spending a lot of time with your business partner(s). Might as well be sure that it’s going to be somebody you like and trust! I couldn’t imagine putting in all of this time and effort with somebody who was simply a business partner. Starting Crowd Surf would not have been as rewarding or exciting if I didn’t have a good friend to share the experience with.” ~ Cassie Petrey, Crowd Surf

4. It Depends

“Be cautious. Know your relationship well and what it can withstand. Make sure you know how you can work together. It will probably help to have a clear decision-making process, whether one person has final say or there’s a team vote, etc. Lastly, adapt as your company does. Realize that the friend that helped you get started may not be the person to help you get to an IPO.” ~ Carlo CiscoSELECT

5. Yes, If You Are Honest and Compatible

“Many people will say no, and I understand that. But as long as you are able to navigate through tough times with honesty and come to an agreement at the end of the day that you can both fully support, I don’t think there’s anything wrong with it.” ~ Chris CancialosiGothamCulture 

6. Absolutely, They Provide Emotional Support Needed to Succeed

“I co-founded Inside Social with one of my oldest friends, Joey Kotkins, and it’s one of the best decisions I’ve ever made. Founding a startup is similar to a long, painful, draining fight. Think to yourself, whom would you rather have sitting next to you in the bunker: a close friend who you trust implicitly or a total stranger? Working with friends provides the emotional support needed to succeed.” ~ Brewster Stanislaw, Inside Social

7. No, Go It Alone

“No. Been there. Remember, someone has to be the decision maker at some point, which will eventually annoy the other person. Go it alone and tell your friend you’ll take him or her on vacation when you make it big.” ~ Mark Samuel, Fitmark

8. Yes, but Don’t Do It Lightly

“I went into business with a friend, and we’re still friends five years later. We have given our best to the business, and it has worked out well. But as in any business — or friendship — we’ve had disagreements. Before going into business with a friend, make sure you are clear about expectations and roles. This can save a lot of misunderstandings — and even your friendship — later on!” ~ Alfredo AtanacioUassist.ME

9. Yes, If They Have Something to Offer

“You should go into business with a friend, but only if he or she meets certain criteria. There should be a high level of trust, the person needs to be mature enough to handle criticism without it affecting your relationship, and he or she should possess a key business skill needed for your operation that’s not in your arsenal.” ~ Andrew SchrageMoney Crashers Personal Finance

10. Yes, If There Is Trust

“I’ve partnered on several different projects with friends. Not all of them have been a success. It really depends on how much you trust that person to work hard and if there is a clear way to exit if the partnership simply doesn’t work. In my experience, partnerships make projects less stressful because you have someone with whom to discuss challenges. Plus, it makes the journey more fun!” ~ Faraz Khan, Khan

11. No, It Will Ruin the Friendship

“When you go into business with a friend, you will turn that friend into a business partner. Any personal relationship you had with that friend will cease to exist once the company starts to generate money. Since I’ve been running companies since middle school, I’ve made this mistake many times. It doesn’t matter how good of friends you are — greed changes people and your friendship will never be the same.” ~ Cody McLain, WireFuseMedia LLC

12. Yes, As Long as Legal Documents Are in Place

“When people go into business with a friend, they tend to ignore contracts. But having tight contracts is almost more important when working with a friend so that conflicts don’t turn personal. Consider an equity earn-in or vesting period for everyone involved so that you can try it out and see how the business relationship works.” ~ Miles JenningsRecruiter.com

13. Yes, Friends Keep You Sane

“Friends make perfect business partners because you will be spending countless hours grinding at the business. They will help keep you sane if you enjoy working with them. Only go into business with friends that possess skills you lack that are beneficial to the business. Just be sure to put in writing work expectations for the future and how you will dissolve the relationship if anything changes.” ~ Robert De Los SantosSky High Party Rentals

Friends Photo via Shutterstock

The Young Entrepreneur Council The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.