The pros and cons of going into business with a friend

You may be planning to form a business partnership and are considering asking your friend to be your partner. There are sound reasons to approach a friend to be a part of your business, including familarity with that person and personal trust. However, while such a partnership can work out, joining up with a friend in a Pennsylvania business relationship can still present possible pitfalls.

An article posted on Inc.com points out that some friends may have personalities that don’t mesh well with running a business operation. Your friend may be a big talker, brimming with ideas. However, your friend should also match words with actions. Business partners need to make their ideas work, and if your partner is only good with words, you may end up with someone that may talk you into a venture that ends up crashing.

Additionally, you have to watch for a prospective partner that has a big ego. A business partnership requires an exchange of ideas and sometimes frank criticism. You may be completely open to someone pointing out the faults in your ideas, but you need a partner that can accept critiques in return. A person that believes they have the answer to every problem might ignore sound advice when it is presented. This can result in arguments, disharmony, and failed business practices.

Then there’s the sad possibility that the two of you go into a business as friends but come out of it as enemies or at least with a wrecked relationship. Running a business presents many challenges and can tax your relationship, particularly when it comes to important business decisions. If you believe there’s a chance your friendship will not survive a business venture, it may be wise to seek another partner.

However, should you intend to go forward with your friend as a partner, Forbes recommends that you give your partnership a test run. Before you commit to a full fledged business, you could set up a pilot project that challenges you and your friend in the areas that the two of you would have to handle in a business. A beta test can also reveal how skilled your friend is at handling important business matters.

Finally, even if you are sure your partnership will go off smoothly, it is crucial to consider the worst possibilities that can befall your business. If for some reason your partner wants to leave or ends up physically disabled and cannot function any longer as a partner, you should draft an exit strategy for you and your partner in advance. Enlisting the help of an attorney can help you avoid possible pitfalls before you end up in legal jeopardy.  

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