alt summit talk: Going Into Business with Friends
Well, we have returned home from Alt Summit 2013 inspired and full of new info! We'll do a full recap of our highlights, but for those of you who were there and wanted to come to our talk but didn't make it, or for those that did not get to attend at all this year, we wanted to give you a high-level summary of the information we shared in our own roundtable, "Going Into Business with Friends". We were friends before we started Ampersand Design Studio together and we have done many collaborations with friends for business as well. Over the years, we have learned many things that we SHOULD'VE done, WISH we would've done, and then there are the things that we HAVE done that just worked! SO, we compiled a little list here to share with you and if you are considering going into business with a friend, we have a pdf worksheet that you can download as well.
Just click here for the download: Going Into Business with Friends Worksheet
And here are a few tips we've learned along the way:
DEFINE THE BUSINESS Are you a good fit? What is your business idea/new venture and why should the two (or more) of you collaborate on it? Write it down and make sure you’re on the same page. What will each of you contribute to it?
STRENGTHS & WEAKNESSES choose someone who compliments your strengths and weaknesses and be honest about what those are for each of you so there are not big surprises. Know yourself well. Things that bother you now will be amplified (tardiness, disorganization, etc.)
TEST IT OUT — Don’t quit your day job (just yet) Pick a trial period, perhaps while you still have other employment to decide whether it’s a good fit. Again, get it in writing.
DEFINE ROLES and make sure they are written down/clear. Who will handle the finances, the PR....even miniscule things like who will take out the trash! If your skill-sets are similar, will you hire someone else to handle areas you’re weak in?
OPERATING AGREEMENT Establish ground rules and get everything in writing up front. Everything may be rosy right now and you feel like you’ll be besties forever, but the sad reality is that it just isn’t always the case and if you have the proper paperwork in place before you enter a partnership, you will have those guidelines to refer to, which will make saving the friendship much more likely. hire a good attorney. Plus, this is a great place to agree on things like, what happens if one of you gets pregnant (how does maternity leave work?) or gets a divorce (will the spouse have claims to any of your assets?), how much vacation time do you each get? These are all things that it’s better to iron out up front. Also worth considering: what to do if one of you isn’t pulling his or her weight? How will you determine this is the case and what will you do at that point? (we have a check-in point every three months for feedback).
EXIT STRATEGY "No one wants to talk about getting divorced while you’re planning the wedding..." Just like with conflict resolution, having a plan in place in case one of you wants to leave the company or the business fails will make things less stressful overall, plus, discussing these issues up-front will illuminate how you see things in general and may give you insights into how the other person see the business long-term. Issues to consider include: amount of notice required, how $ will be handled Third partner example
LEVEL OF DEVOTION What kind of lifestyle do you each want, how much time will you commit? (Are you starting this company for more flexible hours or are you ready to work above and beyond the 40-hour week?)
DEFINE SUCCESS (together) Will you be happy with this being fun money on the side of a day job or is this your life’s dream career?
COMMUNICATION It’s a lot like a marriage— communication is critical. our partnership works because we each really try to do more than the other person and go above and beyond. Get input from each other for any major decisions, especially those involving resources.
RESOLVING CONFLICT First, think about how the two of you handle conflict in your friendship. If you get past things and can be open and not sacrifice your relationship, that’s a good sign. it’s important to establish how you will resolve conflict before an actual issue arises and while you are level-headed. Have this in writing as well. If there are two of you, you will often have a tie when you have different opinions. Do you bring in a third-party? It’s good to have a mentor or advisor in these cases to get an objective opinion.
OUTSIDE OF WORK Remember to maintain the friendship outside of work. Try to not always talk business.
SCHEDULE A TOUCH BASE Re-evaluate/ Touch base from time to time. The fact is, it doesn’t always work, priorities change or life events might readjust priorities: pregnancy, moves, or a simple change of heart, etc. Always give fair warning if one of you is considering a different direction.
If you’ve found that perfect match, CONGRATULATIONS!!! It’s not always easy and people will try to deter you (for good reason), but if you plan ahead and put your friendship first, you can definitely make it work and then it really can be the best arrangement possible. It can be fun to have someone to share the high points with and better to have someone to go through the lows together. We both feel that our business is so much more than the sum of our talents. Every project we touch becomes stronger because we’re both giving our unique input. It has been the absolute best possible situation for us – we wish you all luck! Feel free to contact us with any questions: hello@ampersanddesignstudio.com.
– Morgan & Carrie