We adore our friends—it's so much fun to be by their side, and we have such good times with them while building so many memories. We even know that we can count on them because they have remained in our lives in prosperity and adversity. They have been accomplices, and they know how to keep secrets. In short, they have passed the acid test and have stayed. The natural thing is to share with them the honey of a project that seems to have a good chance of success, but can they be good business partners?

Most entrepreneurs have asked themselves this question for which there is no right answer that fits all cases. Friends are among the most important figures in our lives—they are companions, and they have an advantage: they know us very well, but considering them to be part of an entrepreneurial project can be a trigger that generates sparks, both of success and failure. Before inviting a friend to be part of a business plan, it is necessary to take a break to analyse.

The temptation to turn a friend into a partner is not trivial. We prefer to trust someone we know and esteem than a stranger who can generate suspicion. In the face of what is unfamiliar to us, we are afraid and of course we tip the balance in favour of those who have given us their friendship, but we know well that among friends, business issues are more complicated than it seems.

First, we have to pour a bucket of cold water on the subject. It is very different to be a good partner in the social aspect than in the development of a project. We must separate affections and opinions and start from observable, measurable, and quantifiable conditions that allow us to evaluate if a friend will be a good partner in business or not. In this condition, we are safeguarding two equally relevant aspects: friendship and business.

Why is it a good idea to invite a friend to be a business partner?

  1. Having a partner is having support. It is an option that allows for the sharing of responsibilities and risks, both financial and practical. Good partners contribute, in addition to providing resources, with a variety of skills, capabilities, and experience. They also share decision-making in the management of the business, as well as profits and losses. They support and motivate each other to cope with difficult times. With a friend, the process can be more bearable and fun.

  2. Having someone with similar goals and similar values helps to achieve objectives and achieve goals. Additionally, feeling mutual sympathy and enjoying being together, side by side in the long periods you must share, helps to lighten the load and carry out projects.

  3. Having a trusted expert in fields that are outside our area of knowledge takes away many worries. Being next to a person who knows what we do not know is a great advantage that generates fertile fields and strengthened productive circles.

  4. The sum of two talents always has multiplying effects, even more so when affection, sympathy, and respect are present.

However, it is not always a good idea to integrate friends into entrepreneurship projects. Sometimes, instead of generating virtuous circles, the doors of disaster open and you end up without a friend and without a project. It is necessary to understand that the relationship of investment partners is one of the most delicate and potentially destructive that exists in our world.

A society can be very interesting and productive, but it must be considered that, like any relationship between human beings, it requires patience, perseverance, good faith, and effort. The main thing is that all partners are transparent and honest with each other and that they are willing to resolve, as soon as possible, any differences of opinion between them. That is the key that will prevent problems from becoming destructive and destroying the business and peace of mind.

To do this, it is necessary to have the maturity to speak clearly and attack problems responsibly. There are sensitive issues that must be measured to avoid possible disputes and problems with your partners in the future.

What can we do during the process?

  1. Take the time to develop, explicitly and in writing, a mission, vision, and goals that reflect the convergence of viewpoints for the business. This will help keep the right focus and communication channels open as the business begins to develop.

  2. Define the areas of responsibility of each member, not according to tastes, but based on their individual strengths, abilities and experience, leaving each one free in the exercise of their activities.

  3. Issue an agreement between the partners in which the expectations of each partner are established on key points such as: distribution of profits, division of labour, managerial responsibility within the business, and rules for a potential case of purchase of a partner's stake by the other. This will prevent the business from always being subject to the variable moods of the partners and the personal vicissitudes of each of them—divorces, debts, illnesses, bankruptcies, accidents—as well as the influence of third parties, family members, and spouses. Children, husbands, parents, siblings, and other friends are a spontaneous source of conflicts.

When should we avoid associating with a friend?

  1. When we are inviting them to the project just to lend them a hand.

  2. When they are good for partying but terrible for responsibility.

  3. When we know that they have a compromised financial situation.

  4. We have never seen him work.

  5. When they do not know how to handle pressure.

  6. When they do not understand the boundaries between friendship and business.

  7. When they shout instead of argue.

  8. They have someone attached to them as if they were part of their body, be it another friend, girlfriend, son, etc.

The worst decision we can make is to rush in with a partnership proposal for a friend. Showing interest is not enough. All possibilities must be examined with the utmost care. If there are doubts, if you are unsure that the potential partner can integrate a sensational team, it is better to look for a different option. Work together before formalising the company—do a test. In short, before making a definitive commitment to a friend, it is best to evaluate.

Once the evaluation has been made and if the management indicates that we are heading to partner with a friend, we must propose exit strategies in which both parties feel satisfied. This to ensure that if the project is lost, the friendship can be preserved.

Friends and associates—it can be a good combination, or it can be a monumental disaster. Everything depends largely on the depth of the analysis and the coldness with which society can be prefigured, that for the good of each party. It's horrible to lose a business and worse to be left without friends.