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The Pros and Cons of Starting a Business With Friends

 

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I first met Jonathan Wasserstrum, one of my best friends and now a co-founder of TheSquareFoot and our company’s CEO, nearly 2 decades ago. We became friends almost immediately after meeting in high school, and have been ever since. A few years later, when I went to college at UT, I met Justin Lee, another co-founder and our company’s COO. We always thought it would be cool to work together, so when a career and financial window opened for us 3 to take the leap, we figured, why not?
At the end of 2010, I was looking for office space for my old company, and the process seemed absurdly frustrating. I could not believe the process. So I called Jonathan, who had some experience in the industry, and asked him to describe to me the leasing process for an office space. He described the process exactly the way I was doing it. Doubtful, I called Justin, and he confirmed everything. Eventually I got through the leasing process, but those first phone calls initiated the idea for a better leasing process; thus TheSquareFoot was born. Since that day a few years ago, we have been working together to make the office leasing process as simple as possible.
While working with your close friends has its pluses, you also run the risk of pushing each other’s buttons and disregarding that professional “line in the sand.” We were concerned about starting a business with friends, so before you start, take a look at the pros and cons. 
First, the pros:
You trust each other

Having known these guys for more than a decade, we have a level of trust that comes with the “best friend” territory. We know that no matter what, there are no agendas: We each want the business to succeed, and that is our ultimate goal. For example, when Jonathan takes meetings with other CEOs and companies, we do not worry that he is looking for another job or trying to replace us. It is not the same kind of corporate dog-eat-dog world as in other companies. We are all friends here.
You can speak freely and comfortably

Because my friends and I have developed such trusting, honest relationships with each other, we feel comfortable speaking about anything, and we are not afraid to call each other on our “BS.” If one of us says something that the others do not agree with, we will stay on the topic until we can come to a conclusion that we are all satisfied with, but more importantly that is beneficial to the company.
You share the same vision of leadership

Because I know these guys so well, I know that they have the same vision for leadership that I do. There are often times when we are at a meeting, have an idea, and then all look at each other, knowing exactly what the other is going to say next. This is ideal because then we can set each other up on the pitch or sell without looking orchestrated.
As for the cons, here are 3 we run into most often:
You know too much

The reason there is so much trust between the guys and I is that we know almost everything there is to know about each other, and sometimes that can be a little much. Because we are embedded with the knowledge of one another’s personal life it sometimes can be hard to separate work from home life. My advice would be to try to compartmentalize “work” and “personal.” We do a great job of having a tough disagreement and then leaving for dinner with the decision to not discuss work.
Boundaries are fewer

Speaking comfortably can sometimes breach a barrier of comfort to the point where it is disruptive. No one holds back when we talk in a professional setting, just like no one would hold back if we were chatting in a personal setting. Disagreements can get a little feisty, but it’s almost always for the best. With that said, if you feel like you cannot be direct with your friends and/or business partners, think hard about starting a business with them. Knowing no one has any agenda but to make the company thrive makes the disagreements easy to resolve.
You risk a power struggle

Jonathan, Justin and I are all leaders of TheSquareFoot, and while we typically share the same vision, there can sometimes be confusion about who’s really in charge. If our other colleagues ask for guidance from more than one of us and we give different answers, no one knows whose guidance to follow. Ninety-nine times out of 100 we can fix this with a bit of clear communication, but there is that one time that can cause a bit of a power struggle. Make sure the message from the top stays the same.
Probably the best thing about working with my best friends is the fact that I get to spend all day with them. Sometimes work feels like school or college: we get to come to work with our friends and talk about TV, sports and whatever is going on in the world.
If you are considering starting a business with your friends, I suggest you go by one rule: If you have known them for fewer than 3 years, tread very carefully; if longer, you can feel more confident in understanding their character and how well they will make the decisions that could make or break your business.

 


 

 

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Image credit: CC by Emilio_Labrador

About the author: Aron Susman

Aron Susman is the cofounder and CFO of TheSquareFoot. He lives in Houston, TX.

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