If you've ever considered starting a business with a friend, you've probably been warned against it. You've read horror stories about business partners turning on each other, friendships suffering in the face of financial stress, etc. While it's true that there are risks when mixing friendship and business, it doesn't mean you're destined to fail – you just have to choose the right friend for the right reasons.
In 2008, I started BambooHR with Ryan Sanders, my close friend and business partner. We had worked together in different jobs for several years, so we were familiar with each other on both a personal and professional level.
Among his many positive characteristics were three key factors you should look for in a business partner before making any binding agreements.
Imagine a peanut butter and jelly sandwich. Now, replace the peanut butter with anchovies. Different? Definitely – but different doesn't always mean delicious.
When building a good sandwich, you don't choose ingredients just because they're different; you choose them because they complement each other. When I invited Ryan to start BambooHR with me, I knew his strengths, weaknesses and skills. I knew he brought diversity to my own way of thinking, and that's a huge reason why our friendship and partnership has worked so well.
For example, Ryan is risk-averse, while I'm a risk-taker. In some situations, we've needed to take risks to get where we want to be; in others, we've found it better to stay on course and let a risky opportunity pass us by. With good communication, we've been able to make the right decisions with neither of us feeling railroaded.
The trouble is, many people prefer hanging around others like themselves. Our entire circle of friends may be those who share similar attitudes, worldviews and skill sets. If this is true for you, you might consider looking outside of your group to find a friend who can bring something new to the table. We often overlook the true value of the relationships we create when working, learning and growing alongside others.
Aligned values and goals
Despite our different personalities, Ryan and I are aligned where it matters most: in our values and goals. We believe in conducting ourselves and our business with integrity, trust, selflessness and humility. For us, the objective in building our company wasn't just to make money. Sure, financial success is a goal for many companies; but there's a huge difference between doing whatever it takes to make a buck and building a sustainable, long-term business.
There's nothing wrong with trying to build a business that you plan to sell as soon as it's profitable. But if that's your goal, your business partner must be aware and in agreement. If one partner is there for the long haul, and the other is there to maximize profit, the friendship will quickly erode.
While practicing good communication is common advice for couples, it's equally important in business partnerships.
In any business, you're going to experience failures and setbacks as you grow. It can be painful, and you need a partner who isn't afraid to have difficult conversations with you. If they avoid confrontations when there's an issue, they're not helping – they're hurting.
At the same time, a good partner must also be willing to find solutions to problems rather than just complain about them. Communication is key, but it's also crucial that you remain focused on the more serious issues, not the petty ones.
Because I knew Ryan valued integrity and transparency as much as I do, I knew he would make a good business partner. I'm not going to pretend we've never had a disagreement or a bump in the road – we've had plenty. But we view them as growing opportunities, chances to be clear, to understand each other, to listen and communicate, to focus on what matters most, and to solve real problems.
You may have heard the phrase, "You can be right, or you can be married." It works the same way in a business partnership. It doesn't matter who's right or wrong; what matters is what's best for the company, its employees and its clients. If you build a partnership with that foundational structure, you'll stay friends and find success for years to come.
About the author: Ben Peterson is the co-founder and CEO of BambooHR, an award-winning online HR software used by thousands of businesses in more than 100 countries worldwide. Ben has been a driving force behind the deliberate focus on company culture and is a respected thought leader in the HR community, speaking often on subjects including culture and leadership, HR technology and trends, and employee engagement. Read Business News Daily's review of BambooHR here.