Steve Wozniak and Steve Jobs were good friends when they set out to revolutionize personal computing in 1976. Although their friendship eventually became strained, there is no question the business they developed, known today as Apple, has been successful beyond their expectations. Other examples of friendships that resulted in wildly successful business ventures include Ben & Jerry’s Ice Cream, Google, Starbucks, Hewlett-Packard, and many others. There is no shortage of business success stories involving close friendships. However, there are many more stories of business failures that ended up straining relationships.
As with anything else in life, going into business with close friends has certain advantages as well as disadvantages.
Pro: Trust in a Shared Vision
Of all the positive aspects of friendship, trust is one of the most significant. The corporate world is known to be ruled by cutthroat attitudes that do not promote a trustworthy environment. When business partners are close friends who fully trust each other, shared goals can be reached without having to worry about rugs being pulled from under the feet of those who have a majority interest in an enterprise.
Con: Intense Power Plays
Thirst for power is an unfortunate human trait that can tear apart even the strongest bonds. When close friends are at the helm of companies, it may be difficult to discern who should be the captain of the ship. It is important to determine who should be in charge for the benefit of managers and employees. However, this determination could come into question at any time, and power struggles may ensue. When power grabs happen between close friends and relatives, they tend to intensify and get ugly.
Con: Networking Conflicts
Making new professional contacts can be difficult when friends have the same business goals. The problem is that other professionals will tend to look at the business principals as one and the same. For example, the three owners of a fashion boutique may be trying to add the same designers and distributors to their networks, thus diluting the value of the connection. There may also be disagreements on the type of networking that should be conducted for the benefit of the business.
Pro: Smart Joint Decisions
Close friends can become even closer when they do business together, particularly when they advance their companies by making the right decisions. Let’s say two friends agree on obtaining a San Diego commercial insurance policy with a low deductible that comes at a higher premium. When a loss is covered with minimal impact to the company, these two friends will relish the smart decision they made together. Celebrating business success can boost friendships and make them stronger, which is a very positive aspect of choosing friends as business partners.
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