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The Pros and Cons of Starting a Business with Friends




I first met Jonathan Wasserstrum, one of my best friends and now a co-founder of TheSquareFoot and our company’s CEO, nearly two decades ago. We became friends almost immediately after meeting in high school, and we’ve been buddies 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 three 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 couldn’t believe that’s how it was done. 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, and TheSquareFoot was born. Since that day a few years ago, we’ve 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’s our ultimate goal. For example, when Jonathan takes meetings with other CEOs and companies, we don’t worry that he’s looking for another job or trying to replace us. It’s not the same kind of corporate dog-eat-dog world as in other companies. We’re 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’re not afraid to call each other on our BS. If one of us says something that the others don’t agree with, we’ll stay on the topic until we can come to a conclusion that we’re 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’re at a meeting, have an idea, and then all look at each other, knowing exactlywhat 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 three we run into most often:

  • You know too much. The reason there’s so much trust between me and the guys 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’s 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. That said, if you feel like you can’t be direct with your friends and/or business partners, think hard about starting a business with them. Knowing no one has any agendabut 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’sreally 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’s 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’re considering starting a business with your friends, I suggest you go by one rule: If you have known them for fewer than three years, tread very carefully; if longer, you can feel more confident in understanding their character and how well they’ll make the decisions that could make or break your business.

Author: Currently the co-founder and CFO of TheSquareFoot, Aron Susman began his career in the International Mergers & Acquisitions group at Deloitte in Houston. Most recently a Vice President with MDTech, a healthcare technology company, Aron oversaw the company’s financial, accounting, and business development efforts. He graduated cum laude from the University of Texas at Austin, where he earned a masters degree in accounting and holds a CPA license. 

Published: September 23, 2016

Source: Business Collective

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