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When friends become business partners
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Conventional wisdom hold that money is one of the most frequent causes of arguments in marriage. Common sense suggests that money could easily come between friends, as well. Yet spouses and friends go into business together all the time. Is it asking for trouble to partner with a friend to form a business?
Much depends on the friends, of course. Some friends can weather conflict with hardly a second thought, while others may disintegrate at the first sign of disagreement. Certainly choosing a friend with an even temper is helpful. It also helps if you know each other well enough to have experienced your friend's different moods and knows how they will react in a variety of situations.
But ultimately nothing can substitute for sitting down before committing to a business and having a serious discussion. The friends should discuss their expectations, their goals, their concerns, and their motives. They should try to consider beforehand all the potential conflicts that could arise and determine in advance how they will handle such situations.
Even though it seems unnecessary--even insulting--friends should also put careful thought into documenting how the business will operate. Even though Idaho does not necessarily require a lengthy Operational Agreement or Articles of Incorporation, it makes good sense to ceate one anyway. Such agreements can bring out potential conflicts that might not otherwise been thought of and allows partners to state up front how they will handle them.
It is easy in the beginning for friends to assume "we're friends, and we'd never sue each other." The sad reality is that friendships tend to end before their businesses do, and relationships can degenerate into lawsuits far too easily. Operational agreements help guide partners' behavior so that the business can be ended as smoothly as possible.
On the other hand, friends run successful businesses together all the time. With a little preparation, honesty, and communication, most problems can be avoided--or handled amicably if they cannot. Though it may be foolhardy to assume that friends can run a business together without tension or conflict, there is no reason why partners can run a business and remain friends.
I want to hear from you! Have you partnered with a friend in business before? How did it go? What are some ways you handled conflicts? Would you do it again? Leave a comment below.
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