No one ever said that starting your own business would be easy. By definition, entrepreneurialism requires risk. It's all about abandoning structure and forging a new path for yourself. But if you're not ready to go it fully alone, a co-founder can be a great help.
That said, what happens when your relationship goes beyond strictly business — say, when your partner is your best friend? Or even your sibling? While it may seem like a no-fail plan — you know each other through and through, right? — it certainly still comes with its own unique set of intricacies. Think: navigating disagreements, drawing boundaries without compromising your friendship, or separating work from play.
However, for all the potential stressors, there are still plenty of BFF-turned-business partner success stories to look to, which is why we’re partnering with PayPal to explore what it really takes to make this innately complicated relationship work. Ahead, we’ve tapped folks who nailed the friendship/partnership duality — and others who’ve faced some less-than-desirable outcomes. Keep reading to dive into the highs and lows of going into business with your bestie — and assess your risk accordingly.
Start with a foundation of mutual trust
According to certified executive and personal coach Keren Eldad, one of the greatest benefits of partnering with close friends or family is working with people you truly love. ‘You’ll get to grow together and understand each other more deeply, and that deepened trust can inform the rest of the workplace dynamic,’ she says.
More importantly, you’ll already have established the strong relationship necessary for pursuing business together, explains Shontel Cargill, a licensed marriage and family therapist at counselling and psychiatry group Thriveworks who specialises in friendships. ‘This foundation is needed to collaborate, communicate ideas, and realise your collaborative vision for the business.’
Take Nina Zilka and David Krause, the college-best-friends-turned-business-partners behind inclusive skin-care brand Alder New York, for example. ‘I think learning how to be friends and then learning how to work together is why we have full trust in each other — which is huge when you’re starting and running a small business,’ says Krause. ‘I never worry about not being able to be open and honest about how I’m feeling about our work. So often, businesses and relationships can be completely derailed by not having a healthy line of communication.’
In fact, they both agree their brand wouldn’t have lasted if they hadn’t been working together. ‘There are days when it feels like too much, and I can easily see myself throwing in the towel if it were just me,’ says Zilka. ‘But, we have each other as emotional support and remind each other why we’re doing this thing we believe in. And then when the victories happen, it’s so much fun to celebrate with my best friend.’
For Nikita and Akash Mehta — the brother-sister duo behind Fable & Mane, a hair-care line inspired by their Indian heritage — their lifelong friendship enabled them to build immense trust. ‘We know each other’s strengths and weaknesses, so we had two options — use that to our advantage or disadvantage. We chose the prior, of course,’ they say. 'We ensure strong communication and are committed to having our relationship as siblings only grow stronger in the process.’
Be sure to set boundaries
That’s not to say there aren’t any disadvantages to this type of partnership, though. Learning how to separate your work and personal relationships can be a major source of stress, notes Cargill. ‘The biggest challenge close friends may face is when boundaries become convoluted and there’s no longer a clear line between business and personal life.’
So, how does one set those boundaries? For Krause and Zilka, it’s a matter of ensuring that work meetings take place strictly during work hours. ‘Everything outside of those hours is ‘friends time’ — even if we’re talking about work, it’s as friends,’ says Krause.
Naturally, these lines can blur even more when you’re in business with family. ‘It’s tough, especially as we love what we do for work, but we try to plan a lot of family trips or fun activities during the week to ensure we can detach and bond as siblings and family,’ says Nikita.
But during work hours, when the pressure is on, it’s important to understand that you won’t always see eye to eye. The Mehta siblings expect the occasional clash, but finding a compromise that puts the business first is imperative. ‘Sometimes you have no filter with your siblings, which can often lead to disagreements, but we find quick ways to resolve them,’ says Akash. ‘Often, one of us will cave in and quickly try to find a solution that works well for the both of us, and most importantly, the business,’ adds Nikita. ‘By putting the business first, we can mostly leave our ego at the door and move forward for the greater cause.’
Lean on financial tools & legal agreements
Of course, the challenges that come with business partnerships can be far more complex than the occasional disagreement. When working with her cofounder clients, Eldad notes that it’s common to see communication issues and power struggles, or a tendency to undervalue one another’s work habits — which can give way to a breakdown in trust. For this reason, it’s important to set ground rules and have a solid operating or shareholders agreement from day one. ‘It may be tough, but sit with a lawyer and have this agreement in place before you start,’ says Akash. ‘It’s important to get those tricky questions and ‘what if’ scenarios out of the way at the beginning to pave the way for a smoother journey ahead.’
Additionally, Eldad explains that having different priorities — especially when it comes to money and spending — can leave partners resentful or at odds with one another, so having a financial agreement on how you plan to spend money is also crucial. ‘Business partnerships are similar to marriages, and many marriages fall apart because they fight over money,' says Cathryn Lavery, cofounder of productivity and self-improvement brand BestSelf who ultimately separated from her partner five years after starting the business together. ‘In business, there’s usually more money involved, and you wouldn’t want to work with someone who essentially spends money in ways you wouldn’t agree with, especially if the partnership is 50-50. So have that plan ahead of time.’ These plans should entail sorting out the minute details, too, such as how your credit card points get managed or whether you’re choosing economy or first-class seats when traveling for business.
Choosing a trusted financial partner like PayPal can also help make your life easier by helping you run your business smoothly. For example, utilising PayPal Checkout on your e-commerce site not only aids in building business credibility as an internationally recognised form of payment, but allows you to help retain your global customer base by offering them a flexible checkout experience. Customers can choose to pay via their account with PayPal, credit and debit cards, and Pay Later options (subject to merchant and customer eligibility and status) – thus allowing you to help maximise your sales. By easing the daily stressors that come with the territory of running a business and promoting overall financial wellness, your personal relationship is bound to have more room to flourish.
For the Mehtas, PayPal has been pivotal in allowing Fable & Mane to continue to thrive. The siblings credit its array of services — like its customer success managers, who assist merchants in best utilising its features to promote business growth — for helping them learn how to scale their business in today’s ever-changing landscape. Having someone to answer questions without bias helps ease the headaches of running a small business without putting unnecessary stress on their relationship as siblings.
Moreover, PayPal helped Zilka and Krause traverse the uncertainties presented by the global pandemic. ‘The past few years have been very stressful, and PayPal has definitely made it easier,’ says Krause. Being equipped with the right business tools needed to navigate this tough time — which, as we know, tested relationships of all kinds — allowed them to focus on other priorities and worry less about the laborious admin tasks.
Know when it’s time to change course
That’s not to say every challenge can be worked out. Sometimes, parting ways may be the only solution. As Eldad advises, you shouldn’t push to make it work if it simply…doesn’t feel right. ‘Sometimes, we make an error in judgment about what going into business together will entail,’ she says, adding that both “making it” and making the smart (albeit difficult) decision to part ways when necessary are both notable victories. That said, if either party is experiencing resentment, fear of speaking up, a lack of trust — or if you’re just not having fun anymore — it may be time to consider bringing in a coach or counsellor to help work things out…or, well, move on.
In Lavery’s case, it took a few years for her to acknowledge just how much she and her partner’s business ideas differed. ‘At one point, we were being equally compensated even though I was working more, leading to a buildup of resentment on my end,’ she says. ‘I felt under-appreciated and like I was putting in all the time and effort to make this successful, yet we were both making the same amount of money.' Having different visions for the company’s future, they also couldn’t reach a compromise when attempting to sell, which led to her decision to fully buy it out — after months of legal negotiations (and steep fees).
In any case, when it comes to going into business with someone close to you, Lavery advises that you make sure you truly want and need a cofounder. And if you decide you do, she says you should choose someone right for the business rather than basing your decision solely on the quality of the friendship. ‘Write down the qualities your ideal partner would have and be objective about the business’ needs,’ she says. ‘If the friend in question matches up with your core values from the get-go, it just might work. But if that’s not the case, you have to be honest with yourself about whether it’s the right move.’
Needless to say, no matter how close you may consider your relationship, you and your BFF/business partner are bound to hit some bumps in the road along the way. 'It’s really hard, and you can’t just have a casual relationship — you have to be prepared for your friend to become your life partner,’ says Krause. That said, Zilka says it’s crucial to know how to navigate disagreements together before you begin. ‘When you’re in business, you can’t argue over a decision that has to get made, so figure out a plan for handling conflicts with your future business partner,’ she says.
And last but far from least: ‘Make sure you are both equally obsessed with the business,’ says Eldad. ‘If entrepreneurship is your dream and your partner just likes the general idea, one of you will outlast the other in the long run. It’s like any great marriage — you must have equal skin in the game.'
Going into business with your BFF? PayPal equips you with the tools you need to help put your mind at ease so your business – and your friendship – can flourish. Learn more about how PayPal can help you run your business here.
‘The information in this article does not constitute financial, business or investment advice of any kind and does not count as a substitute for any professional advice. Always do your own research on top and seek professional advice if you want to ensure that what you do is right for your specific circumstances.’