With more people thinking about how they can diversify their income, more side hustles have evolved into successful start-up businesses.
According to data found in the 2024 UK Labour Market Statics, between February and April 2024, there were 28.54 million people who were employed, while a further 4.32 million were self-employed.
Some of the people who are self-employed in the UK are running businesses that have been co-founded with well-acquainted friends that they know and trust.
But even though it would be great to set up shop with friends, it could get tricky if you don’t always agree or deal with challenges adequately. Is it a good idea to start a business with a friend? A business coach and co-founders share their thoughts, experiences and advice.
Establish clear roles and expectations
Josh White, CEO and co-founder of Cano Water has successfully built a business with his childhood friends Ariel Booker and Perry Fielding, and can say that it has been incredibly rewarding and motivating, but of course, as with everything in life, it has also come with its own set of challenges.
“My childhood friends and I took this leap, driven by our shared determination to tackle the global plastic crisis. This common purpose led us to create Cano Water, the world’s first canned water brand, transforming our personal bond into a professional mission,” he said.
“Our venture has not only strengthened our friendship but also given us a platform to make a real impact. But there are things to consider before embarking on this path.
“It’s crucial to define each person’s responsibilities and areas of authority from the outset. In our case, we played to our individual strengths – I focused on overall marketing and strategy, Perry on branding and design, and Ariel was on sales. This clarity helps prevent misunderstandings and resentment down the line.”
Business coach and founder of Big Business Events (BBE) Adam Stott agreed and added: “Regular reviews of these roles can also help in adapting to the business’s evolving needs.”
Set boundaries
It’s crucial to establish clear boundaries to keep friendship and business separate.
“You must define when to be friends and when to be business partners. This distinction helps in maintaining a professional environment while preserving the personal relationship,” said Stott.
“Setting up specific times for business discussions and ensuring that personal time remains untouched by business matters can help maintain this balance.”
Have a shared vision
For co-founders Ruby Aryiku, Rumbi Mupindu and Christina Okorocha of VAMP, who met at university and started their digital talent and entertainment PR agency in 2017, there are no regrets. But they admit that starting a business with friends is not for the faint-hearted.
“The hard part of making a decision to go solo versus with friends is whether there is a shared and equal goal/purpose. Without that, during the inevitable difficult periods and differences, those cracks will start to show. And if you’ve built a business from a passion, those cracks will hurt. Therefore, try to have a clear understanding of what you hope to achieve and the things you will and won’t do to get there,” said Aryiku, the PR director.
“It’s important to start with your purpose and make that the deciding factor for all decisions. Next, discuss the exit. This may seem morbid but you have to know where you see the business going, do you plan to sell the business? If so, how many years are you giving yourselves? There always needs to be a common goal or it won’t work in the long run,” said Okorocha, the director of entertainment.
Like any relationship you get into, communication is key, open and honest communication, added Mupindu, who is the director of talent.
“You have to be willing to have the hard conversations but also understand it’s for the betterment of the business. We are all working towards the same goal and want to succeed so having that understanding goes a long way and perspective is everything,” she said.
Develop a robust conflict resolution strategy
Disagreements are inevitable in any business, but they can be more complex when friendship is involved.
“We established a protocol for addressing conflicts professionally, including regular check-ins and, when necessary, bringing in a neutral third party to mediate,” said White.
Talk about money
Charlotte Courtney, co-founder of Develop Digital, has worked with her business partner Caitlin McLaren for the past three years. But a question that she is often asked during her business journey, is how they manage the financial aspect of owning a business together.
How do you split the profits? How do you know what money to take out of the business? Is the money split 50/50 after expenses?
“We’ve found it easy to manage cash in a partnership because we are aligned in our goals and vision. We’ve never had a disagreement or difficult conversation about what to do with the cash in the bank because we established boundaries early on.
“It’s critical to have a similar mindset and approach to money as your business partner. You don’t want to generate a healthy amount of cash and find that you’re a super saver and want to retain cash, but your business partner is a super spender and wants to splash out on a new purchase.
“We drew out a cash-flow plan for the first one to two years at the beginning of our journey and it opened up a great conversation about what we’d do with the profit if we hit targets.
“When we’ve achieved success or have had a great month, we celebrate and make decisions together on how we can reinvest that money into advancing our knowledge through courses, supporting our journey with a coach, or reinvestments into new ventures to continue our growth.”
