The first key to making business with friends work is ensuring that, as with any other business decision, you enter into the partnership with a clear head and agreed shared objectives.
The process of entering into business with friends needn’t be dissimilar to entering into it with a stranger. Someone will not necessarily be a good match for you as a business partner by virtue of being your friend, and you must be impartial and transparent when deciding whether it can work.
If you know you are not compatible as business partners then you must treat your friend and yourself with honesty. There are countless tales of friendships being forever tarnished by a business, and you don’t want to find yourself in a position where you are faced with a choice between losing an important friendship and risking your business.
I have personal experience of this. In the past I brought a good friend of mine into a business that I was CEO of. After a while it became clear that he simply wasn’t up to the job in hand and I had no option but to let him go. That was 17 years ago and we have never spoken since. While I regret losing him as a friend, I know that it was the right decision for the business.
You need to be able to quickly establish the direction you see yourselves and your company heading in. What is your five-year plan? Your ten-year plan? How are you getting there? If these are issues you don’t agree before entering into business, the problems will only exacerbate as time goes on.
Next you must be clear on your roles. The best partnerships and the best friendships come about when two people complement each other’s personality and skill-set. One of you may be better suited to the hands-on running of the business, another may be a good public face who enjoys the marketing side of the business. Know each other’s strengths and play to them.
When it comes to going into business with friends it also helps to have worked together previously. How you behave in a pressurised working environment does not necessarily correlate with how you behave in your leisure time. Having some idea of what awaits when you are working together will prepare you better.
Once you have entered business it is imperative that you are transparent and candid with each other. This is an area where working with friends has potentially huge benefits. You can be honest with each other in a way you would not be with a stranger, you can bounce off each other’s ideas. With concerns about politicking out of the way and the propensity to be more open and honest, the potential to advance your business is enhanced.
Honesty is good, but prudence is equally valuable. Disagreement and challenging each other are a good way to analyse your personal performance and improve yourself and your business, but it’s very important not to disagree in front of others. You’ll doubtlessly argue about some things but keep it private so as not to create a toxic working atmosphere.
On a personal level, there are great positives to sharing in a business with a friend. When you achieve success, what better person to share in that success with than a friend? Equally, who better to pick you up from disappointment or during a worrying time than a friend? When the partnership clicks, there is nobody you would rather have by your side.
I am currently in business with friends for the second time, and know just how effective it can be. The joint co-founder of Christopher Ward, Peter Ellis, and I worked together at the Early Learning Centre very successfully, before selling the brand in 2004.
Our next step was to go into business with another friend, Chris Ward, to found Christopher Ward watches. The secret to our success is that we all bring different skills to the business that complement each other.
Peter takes care of the financial side of the business, a role he also fulfilled when we worked together at the Early Learning Centre. Chris heads up sales and I concentrate on strategy and marketing, and it all works very well.
Having a management team who know each other well, are pulling in the same direction and are all firm friends has served us extremely well in the last decade. It just goes to show that if you approach going into business with friends with transparency and share in common goals, your brand will benefit.
Mike France is co-founder of watch brand Christopher Ward and formerly turned around Early Learning Centre from losing £10m to making £15m.
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