Founder of Four Sigmatic – a functional foods company making the world’s most nutrient-dense foods more delicious and easier to consume.
Growing up, you probably thought you would be working and living next to your best friends for the rest of your life. For many, that dissolves as you grow older. But a good percentage of entrepreneurs do decide to go into business with friends. And while this can be wildly rewarding, it can also be fraught with tricky interpersonal negotiations that you’ll need to navigate.
As someone who has been in business for 10 years with a changing cast of friends, this is how we did it without hating one another (most of the time).
Remember that change is inevitable.
In 2011, I started a business with two of my friends, Mikko Revonniemi and Mika Rantanen. We were based in Hong Kong and sold blenders, herbal extracts and raw honey mostly to European customers. After three years, neither of my friends were part of the company’s operations. But I still had the fire to help people elevate their wellness with natural foods, and I knew that to have a global impact, I had to be in the U.S. Fortunately, two of my other friends and employees, Mikael Makinen and Markus Karjalainen, shared my vision. In 2015, I founded a new U.S.-based company, and together, the three of us (and a few trusting angel investors) bought my first company’s remaining assets.
Although my original co-founders and I were only in business together for less than three years, we started off with the understanding that we were taking the risk and we would only do it as long as we were all finding it rewarding. By 2014, both of them wanted their life to look different than the hectic, 24/7 requirement of starting a company with little-to-no pay. And that’s OK.
When going into business with friends, remember that change is inevitable.
Introduce paperwork into your relationship.
In my first business, my friends and I had a partnership agreement, which allowed their transition out of the company to be (somewhat) smooth. So, always start with the assumption that change happens—and put that scenario in writing so you all agree on what happens when that change comes.
I know there’s nothing fun about writing up a contract that directly states what your relationship and expectations are. But as time passes, you will want the ultimate clarity that contracts provide when it comes to roles and responsibilities within the business. Hire a lawyer to draft up a contract between your founders, and then store it somewhere and only refer to it when you need it.
Rely on your solid foundation.
Starting a new business is hard. And, often, it can be really lonely. One of the biggest benefits of going into business with friends is that they know you very intimately. They know who you are when you’re not an entrepreneur. They already know your style of communication. They can flag when your mental health is deteriorating. Lean on these personal connections while weathering the harder parts of your new business. Sometimes that carries you through the tough times, and sometimes it doesn’t. But surely it makes things easier.
Spend friend time together (with moderation).
When you’re in business with friends, it’s easy to fall into the habit of only spending time with them at work. You have to be intentional about doing things that do not involve work at all. Set plans for dinner where you can’t talk about work. Or, do something together where talking isn’t the focus, such as playing a sport, going to the theater or attending a concert. Do the things together that you used to do before work entered the picture to be sure that you are staying friends first.
When you prioritize your friendship, going into business together can be wildly rewarding. You will likely reach a deeper level of your relationship, and you are literally building the business and life you want with your good friends. But also don’t overdo it. In late 2015, I agreed with my new partners to limit our off-work time together. We had been living in the same place in California, launching our products in the U.S. when we hit a limit. It was better to all have a life outside of one another, but we still took the time to hang out outside of work almost monthly (but not daily or even weekly).
Working with friends has its positives, but it also has its challenges. Thoughtful communication and planning in advance can make the tough entrepreneurial journey much easier.