The Partnership Dilemma: Navigating Business Ventures with Friends

By Steven Schneider

So, you want to start a business with your buddy, huh? The idea is pretty tempting, I’ll admit. Who wouldn’t want to dive into the exciting and occasionally nerve-wracking world of entrepreneurship with someone they trust? While Todd and I were not friends when we became partners, we know a lot of business owners who have made this choice.

Mixing friendship and business can feel like a dream... until it turns into a bit of a balancing act on a tightrope. Here’s how things can go off the rails—and what you can do to stay upright.

When Dynamics Shift: From “BFFs” to “Business Partners”

Before you go printing matching “co-founder” hoodies, be warned—things change once business enters the picture. As friends, disagreements are no big deal. Maybe you argue over who forgot to bring the beer to the BBQ, laugh it off, and move on. But when it’s about real business decisions—ones with actual stakes—those little tiffs can become big-time standoffs.

In fact, your friend’s “harmless” habit of showing up five minutes late? Suddenly, it’s not so cute when you're both waiting on an investor call.

Todd and I know firsthand that even small decisions—like how to manage a budget—can snowball into larger misunderstandings. And when you’ve got history, every disagreement can dredge up old baggage: “Remember that time in 2014 when you didn’t listen to me about that app idea?”

Who’s Driving the Ship, Anyway?

When you’re friends, everyone has their lane. Maybe one of you is the “big ideas guy,” and the other is the “details and spreadsheets” person. But when those lanes start to blur in a business setting? Buckle up—because now, both of you want to be in the driver’s seat.

Egos can flare, especially if one of you suddenly becomes The Boss while the other expects a more collaborative vibe. Todd and I have seen this happen with clients (and, well, let’s just say we’ve learned a thing or two ourselves). Roles that used to feel comfortable—like, “I’m the chill one, and you’re the planner”—can suddenly turn into power struggles. And let’s be honest, no one likes feeling benched in a game they thought they were co-captaining.

“We Don’t Need Formal Agreements, We’re Friends!”

This one’s a classic mistake. Friends think, We’ve got history, so we don’t need all that formal paperwork stuff. We trust each other! Spoiler alert: No, no you don’t. Or at least, not enough to wing it without a plan.

Here’s the thing—when the money rolls in (or worse, when it doesn’t), even the tightest friendships can unravel if roles, responsibilities, and expectations aren’t clear. Trust me: nothing ruins a friendship faster than realizing your buddy assumed “taking care of the budget” meant “ignoring it until year-end.”

Tips for Better Friendship Partnerships

We’ve learned a few tricks along the way—some the hard way, mind you. If you’re thinking about going into business with a friend, do yourself a favor and start with these steps:

Define Who Does What (and Write It Down)

“We’ll figure it out as we go” is not a plan. So, sit down, talk it out, and assign roles—before you launch. Who’s handling what? Who has final say on decisions? Write it all down. When there’s clarity from day one, you’ll save yourself a world of headaches later.

Get Legal Agreements in Place

Look, I'm not saying you need to lawyer up every time you brainstorm. But formalizing your partnership with legal agreements is non-negotiable. Make sure to outline exactly how decisions would be made, how profits (and losses) would be split, and how we’d handle disputes—because disputes will happen.

Structure the Business Like Grown-Ups

Business can be fun, but you’ve also got to set up proper systems—like financial practices, a business structure, and operational processes.

Hope for the Best. Plan for the Worst.

I don't want to sound like a broken record, but conflicts happen—even in the best partnerships. That's why it's so important to set up ways to deal with disagreements before they explode. Mediation, arbitration, or even just a cooling-off period can work wonders. Todd and I use scheduled check-ins to talk out issues and keep things from boiling over.

Draw a Line Between Friend Time and Work Time

You’ve got to know when to wear the “partner” hat and when to switch to “friend” mode. Mixing the two too often can lead to resentment. For many friends, this rule works: business talk stays at work. When you’re off the clock, it’s time to grab a beer and leave the spreadsheets behind.

Over-Communicate

Communication is like flossing—it’s annoying, but neglect it, and things get messy. We make a point to talk through everything, even the little stuff, to make sure we stay on the same page. You’d be amazed how much drama you can avoid just by checking in regularly.

So... Can It Work?

Absolutely. But it takes work—and not just the kind that shows up on your P&L sheet. Merging friendship with business requires effort, patience, and a lot of communication.

The key? Treat the partnership as seriously as any other business relationship—maybe even more so. In the end, the goal is to build something that not only makes money but also keeps your friendship intact.

 If you’re ready to take the plunge and want a little help along the way, contact The Partnership Guys. We’ve been through it all, and we’ve got the scars (and success stories) to prove it.