4 Tips For Starting A Business With Friends As Co-Founders

tips starting business with friends co-founders

Founding a business with friends needs to be carefully planned. Friends have a lot in common, like and understand each other, and want to realize ideas together. But starting a business with friends needs to be well planned. If you just get started without the help of a lawyer or tax advisor, you will be putting your friendship at risk. It's a very similar risk to starting or joining a family business.

Before you start planning, you should ask yourself one more question: Why do you want to start a business together? 

In addition to the advantages of founding a company in a team, founding a company with friends has another big plus: familiarity. You share common experiences and have a big bottle of champagne in the fridge from the first day to celebrate the coming success together or enjoy the gambling on Woo Casino login or gaming together in the evening. Maybe you even dream of someday ringing the opening bell on Wall Street together as your company IPO launches. 

However, problems with even a small work project can quickly break up the friendship. And there are a few things to keep in mind if you start a business together with friends. 

1. Founding With Friends Also Requires Contracts 

There is at least one major starting advantage for any company founded with friends: the people involved already know that they like and understand each other - otherwise, they wouldn't set up something together. A kind of common mission is also usually present in this type of business start-up - most likely at least unspoken. 

Friends usually share certain values, which are then to be lived in the business and perhaps even explicitly become the purpose of the company. This is important - with good reason, experts advise the formulation of a so-called mission statement, i.e., corporate mission statement, also and especially for family businesses. 

2. Co-Founders With Friends Must Consider Rights And Obligations 

However, entrepreneurs planning to start up with friends should first understand counterarguments as important questions to which they are looking for answers. With a lawyer and tax advisor, many problems can be solved as part of a comprehensive start-up consultation. Financial circumstances and creditworthiness should, of course, be completely and openly laid out on the table right at the beginning. Responsibilities should be as clear as possible. Both can save a lot of trouble later. 

The friends should also be aware of the sometimes quite extensive liability risks for managing directors. 

3. Rationality Is Important When Founding With Friends 

What has been clarified in advance will not cause any trouble later on in the day-to-day running of the company. It's as simple as that when founding a company with friends. And perhaps it already becomes apparent during these preliminary discussions that the buddies are not as good a founding team as you thought. This can prevent difficulties and even save friendships. 

Perhaps the joint entrepreneurial idea can be better realized in other ways? If it only becomes clear after the start-up with friends that they do not harmonize well, after all, agreed trial phases or defined ignition stages for exit scenarios and regulations are helpful. In any case, it should be clear to everyone involved that communication and firm agreements are just as important when founding with friends as rational decisions and contracts that take private contingencies into account. 

4. Keep Your Eyes Open When Choosing A Partner 

Now you know what you need for a successful team foundation. But who is best suited as a partner for your idea and where can you find this person? Many friendships or even marriages have broken down because of a joint business. You can indeed assess people close to you much better and know what you're getting into. But sometimes you only really get to know even your closest relatives in an extreme situation. Find a partner you trust, this can be a colleague, but also a friend or romantic partner. 

Starting a business with good friends sounds great but be careful! If friendship is important to you, you should think about a few things in advance, which can maintain both business and friendship.

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