Anyone done business with a friend?

[jmcollier]

Long story short.

Good friend sees an opportunity for me to join his business. It honestly seems like a great fit for a lot of reasons.

But the conventional wisdom not to do business with friends is holding me up a bit.

Does anyone here have experience in this space? Have you stayed good friends? Have you become better friends? Enemies?

I know there’s a lot of nuance but I’m just hoping for some perspective.

Thanks all!

Opportunities with friends can work incredibly well, but only if the foundation is solid.

The biggest mistake I see—over and over—in litigation between former friends, partners, or even family members is that they relied on trust instead of documentation. Everything feels great on the front end, so no one wants to “formalize” things… until they disagree, and then the lack of clarity becomes a very expensive problem.

If you decide to move forward, I would put every expectation, responsibility, ownership interest, exit plan, and dispute-resolution process in writing. Not because you don’t trust your friend, but because clear agreements protect both the relationship and the business.

I’ve seen friendships strengthen when the business is structured well from day one—and I’ve also seen friendships implode when people skip that step. Good paperwork doesn't guarantee success, but it dramatically improves the of preserving the friendship over the course of the business.

 

[LightFoot]

Opportunities with friends can work incredibly well, but only if the foundation is solid.

The biggest mistake I see—over and over—in litigation between former friends, partners, or even family members is that they relied on trust instead of documentation. Everything feels great on the front end, so no one wants to “formalize” things… until they disagree, and then the lack of clarity becomes a very expensive problem.

If you decide to move forward, I would put every expectation, responsibility, ownership interest, exit plan, and dispute-resolution process in writing. Not because you don’t trust your friend, but because clear agreements protect both the relationship and the business.

I’ve seen friendships strengthen when the business is structured well from day one—and I’ve also seen friendships implode when people skip that step. Good paperwork doesn't guarantee success, but it dramatically improves the of preserving the friendship over the course of the business.

This^^^

Have an experienced lawyer draft your agreement. Choose a lawyer that asks the hard questions and not just one that drafts what you think your agreement should be.


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[voltage]

I am not saying ol Dave is always right, but I think this is worth a listen.

 

[307]

Was that sarcasm lost on you?


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No, but it appears that my joke was lost on you.

 

[Poser]

I've done it a number of times and a number of ways. I can't think of any example of any of these deals going particularly bad and none of these deals resulted in any real blowups, but I'm not actively friends with any of these people anymore either. Not enemies, but haven't spoken in years either.

There was a time that I aspired to have my hands in all kinds of business so, naturally, the people you know are the people with opportunities.

 

[Terrapin]

My experience is that about twenty years after the inevitable dissolution, you go back to being friends. In the interim, you’re not really enemies, but you’re not really friends either… same with amicably divorced exes.

(5 businesses… 1 ex)

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[wapitibob]

The FIRST thing you do in a partnership, is get rid of the partners.

 

[roadrunner]

As long as neither one expects something different than they do from anyone else.

Friend Employee: so special treatment or extra favors should be expected.

Friend Employer: no extra effort should be expected OR don't be a jerk by going above and beyond to be harsh so as to not show favoritism.

This is why these relationships can go south.

 

[S-3 ranch]

I tried it, it was a big failure, we both had blame in the end, we didn’t remain friends
Even our wives hold resentment towards each other! Big mistake for me

 

[GSPHUNTER]

Never go into business with friends or family. I currently have two friends who are going through court to settle issue with co-owned property they share with family.

 

[Smoke_Rutz]

No, but it appears that my joke was lost on you.

It definitely was.


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[Smoke_Rutz]

Opportunities with friends can work incredibly well, but only if the foundation is solid.

The biggest mistake I see—over and over—in litigation between former friends, partners, or even family members is that they relied on trust instead of documentation. Everything feels great on the front end, so no one wants to “formalize” things… until they disagree, and then the lack of clarity becomes a very expensive problem.

If you decide to move forward, I would put every expectation, responsibility, ownership interest, exit plan, and dispute-resolution process in writing. Not because you don’t trust your friend, but because clear agreements protect both the relationship and the business.

I’ve seen friendships strengthen when the business is structured well from day one—and I’ve also seen friendships implode when people skip that step. Good paperwork doesn't guarantee success, but it dramatically improves the of preserving the friendship over the course of the business.

Valueable insight. Thank you


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[gbflyer]

I tried it, it was a big failure, we both had blame in the end, we didn’t remain friends
Even our wives hold resentment towards each other! Big mistake for me

I’ve seen that. Sadly, in what I’ve experienced, one partner involved his wife in the business. It was all fine until that point. Jealousy and second guessing everything took over and what was good became a train wreck.

 

[tt_johnsclist]

I have hired 4 different good friends to work for me. Well, 2 came with the job when I took over the business, I hired 2 more friends later on. The first two no longer work for me, I eventually had to let them go. The second two still work for me, and are good employees, we get along good, but we are longer tight friends.

 

[KenLee]

Just say no. No to working together. No to buying a boat together. No to buying land together.
If you insist on doing this, save some time by throwing $ in his face and smacking the sh** out of him. Same result, less drawn out pain and anxiety.

 

[Tobe_B]

Having both worked with and for friends/family, in all combinations, you’d better lay down some serious ground rules and have a lawyer write it all up. Worked for my wife’s family for several years managing the ranch and farm, ended fairly abruptly and poorly, all parties at fault. Took a few years for my wife to really get along with her mother again. Took even longer for my MIL to be comfortable being around each other again.

Came in to a company with someone I thought was a good friend. Learned a lot about him I didn’t see until around him everyday. That went down in a pile of flaming dog poop on a porch.

It can work though. Define the roles and responsibilities of each party and it can be a ton of fun working with someone you know and trust. There is something effortless about working with someone that you already know and have a good set of communication skills with.