Going into business with a friend - would you? Have you?

[sheeplikessleep]

Interested to hear if it's worked or not for others. Thanks

Having been in business with a friend, I personally wouldn't do it again. We made the predictable mistake of not formalising everything properly before we started with regards to roles and responsibilities. It transpired that we had different expectations and goals, and it didn't work out. The excitement got in the way!

We are still friends though, although it could have turned out very badly.

I would second Saffra. Unless you formalise the arrangement and lay out clear expectations on both sides, it can go horribly wrong.
This happened to me last year and, although my friend and I are OK, it has left a bitter taste for me.

It's such a huge shock when it happens, although when you look back, it seems so obvious. Hindsight and all of that.

The problem with outlining roles and responsibilities is that you won't know the demands of the business before you actually do it.

I think it's probably inevitable that one of you is more invested into it (whether it's financial or emotionally, or whatever), and it's not hard for imbalances to occur.

I think it depends on your individual personalities too though. And, really, just because it didn't work for me, doesn't mean it doesn't work. It's just a bit of a minefield as far as I'm concerned.

As an adviser - DONT unless you have legal advice from the outset and I would suggest a Ltd Co as then one of you can always buy the other out.

I'd second everything above and add that it makes a huge different what your personal circumstances are too. e.g if one of you needs to make a living from the business and for the other it's just pin money, your commitment wil be very different, which will cause resentment.

thanks all for posting. i'm a sole trader at the moment, friend is a limited company. she's asked if i want to join her as equal partner (although we live about an hour and a half away, so would be remote working). i'm debating this versus setting up my own limited compay.

would be good in that we can collate clients / share work and bounce ideas off each other. i guess the chance of one of us getting more work in / be busier might then cause resentment.

i think we'd have to be 50/50 on everything - hours, profits, input and discuss and get everything in writing upfront. we do have different strengths though, so i guess responsibilities would be different.

i also want to check our turnovers at the moment are similar.

agh, what a decision!

For bouncing ideas off each other, you don't need to join forces. Perhaps you'd be better to meet up once a fortnight to help each other to grow your own businesses separately.

For bouncing ideas off each other there is nothing better than a good forum nowadays.

I started on the ebay business board. Despite being competitors, all the posters have a vested interest in the success of the venue.

UK Business Forums - all on the accounts board have a vested interest in better compliance in general

This board is less focused but potentially excellent as it does not have the testosterone coefficient!

Are there clear advantages in you becomeing one company? I have formalised 'associates' who work with me on specific projects, and I am also a specialist associate for another bigger company. This arrangement allows us to agree specific terms and rewards in relations to each piece of work.

How have things gone this week?

I think there are probably better ways for both of you to benefit out a working relationship than becoming one company.

Without knowing what you do or how you compliment each other it's difficult to be very specific - but don't make the mistake of thinking that having one company is the only way for you to both benefit from each others strengths.

thank you all for posting. sorry i've not been on much this week and have missed your posts, so apologies for taking so long!

really interesting posts, thank you. we work in qualitative market research, so work on ad hoc projects, each about 6 weeks in duration. we've decided to see how things go in the next few months (she is also pregnant at the moment, with her first dc, so we both feel like the timing isn't right right now). interesting about 'associates' (i know she's given my name in sales meetings as someone she works with). i guess would be good to formalise hourly and daily rates and sub-contract out to each other. we'll see how it goes. thanks all for posting.

Good Luck - I hope you can work something out between you :)