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Business and Friendships: Strategies for Mixing the Two


It’s not uncommon for budding entrepreneurs to enlist the help of friends and family when their startup is initially taking off. Although most business owners advise against it, mixing friendship and business isn’t always a detriment to your professional goals. In fact, with the right planning and people, it can become your company’s greatest strength. It has been shown that 70% of business partnerships fail. This makes it risky to enter a partnership with a friend. 

But starting a business with a friend isn’t the only way to conduct business with them. Many business owners seek to merge their relationships and businesses by offering their products and services to their friends and family. While this is often a good idea, it too comes with its risks and challenges. In this article, we’ll look at the challenges and best practices of doing business with friends. We will examine from the perspective of partnering with a friend as well as treating friends as clientele

Challenges of Mixing Friendship and Business

There are several reasons why most entrepreneurs don’t advise teaming up with friends and family when going into business, and most of them revolve around interpersonal conflict. The most important thing you can do when making this decision is be honest with yourself about your own habits as well as the dynamics present in your relationships with others.

For example, if you know that you’re a highly ambitious and diligent individual with high standards, you might not want to employ your laidback weekend buddies. Similarly, if you struggle with confrontation and direct communication, employing a friend might be a bad call altogether.

Here are some other challenges to the dynamic:

  • Unspoken Expectations: When doing business with a friend, there may be unspoken expectations on both sides. Such assumptions can lead to misunderstandings and resentment if not addressed early on.
  • Conflicts of Interest: What’s best for the business might not always align with what one feels is best for the friendship, leading to difficult choices.
  • Difficulty in Addressing Underperformance: If a friend isn’t pulling their weight or meeting their obligations, addressing the issue can be delicate and potentially damaging to the personal relationship.
  • Unequal Investment: When friends go into business together, there might be assumptions about shared responsibilities, which, if not discussed openly, can lead to feelings of being taken advantage of or undue burdens on one party.
  • Financial Strain: Money is a common stressor in many relationships, and even more so in business partnerships. If the business faces financial difficulties, it can strain the friendship.
  • Risk of Echo Chambers: Friends often have shared experiences and views, which can lead to a lack of diverse perspectives in business decisions. 
  • Dissolution Complexity: If the business needs to be dissolved for any reason, the process can be much more emotional and complicated with a friend. 
  • Potential Loss of Friendship: If the business venture goes sour or if conflicts arise that can’t be resolved, it might mean the end of both the business and the personal relationship.
  • Inadequate Formalities: Because of the friendship, there might be a tendency to forgo formal agreements or contracts. This oversight can lead to disputes later on.
  • Resentment: Business owners may feel resentment if their friends and family DO NOT do business with them. 

Now let’s take a look at how to handle doing business with friends as partners and as clientele.


Friends As Partners 

1. Prioritize Skills and Experience

One of the biggest concerns you may face when employing friends is a potential lack of expertise. Although friends and family can act as trusted advisors, it’s important to ensure that they have relevant experience within the field. Your business will only be as successful as its employees, including yourself; hiring for personality alone isn’t a sound business practice.

2. Set Boundaries

It’s inevitable in all social and professional relationships that boundaries will become a necessity. In order to maintain a healthy relationship with your friend and business partner, you must make a point to establish – and maintain – clear boundaries.

For example, while you might have no qualms about texting a friend late at night, as a business partner, you probably want to limit professional conversations to business hours. These types of boundaries help create a work-life balance, thus allowing you to maintain a pleasant friendship while still respecting your partner’s right to privacy and leisure time.

It’s helpful to discuss specific roles and boundaries with your business partner ahead of time. Don’t be afraid to let them know that although you value their friendship, you also want to manage a successful business. There’s nothing wrong with separating time spent as friends from the time you both spend as business associates, either. Creating these distinctions can help prevent confusion later on.

3. Communication is Key

When you go into business with a friend or family member, communication is especially important. At first, it might be difficult to have professional conversations with a friend after years of casual interactions. This doesn’t mean you have to use exceedingly formal language or schedule a meeting for every conversation – but it does mean holding them to professional standards and being accountable.

When you and your business partner inevitably disagree on a certain decision, it’s critical that you air your grievances right away. You must get vocal about your stance before the dispute creates a division between you. Some people tend to “let things go” when their associate is a friend, and it can end up costing your business in the long term.

Instead, it’s always better to be direct, open, and honest. Even if neither of you concede in a disagreement, there’s almost always a middle ground to be discovered. Be willing to compromise and hear them out, just like you would with any colleague.

4. Create a Legal Agreement

Starting a business with a friend can be a promising and exciting opportunity. When two creative minds come together and have the right chemistry, incredible things can happen. That being said, there’s no shame in protecting yourself when going into business with friends by getting legal documentation for your business scenario.

Create a contract between yourself and your business partner when you first start working together. This contract should communicate the roles you each have in the partnership. It should also outline the responsibilities you have (both separate and shared) and potential remedies for anything that might go wrong.

It’s wise to create a Partnership Agreement or Operating Agreement as well, which dictates how company decisions are made, how company property is divided, and how profits and losses are split between partners. Having a solid backup plan can save your company – and your friendship – from unexpected disaster.


Friends as Clientele

The same advice for going into business with a friend can apply to taking on friends and family as customers. This relationship, although still a hybrid between personal and professional, is a little different. As a business owner, you likely have a certain way of engaging with customers. When one of those customers is a close friend, things can start to feel complicated.

1. Stand By Your Policies

Sometimes, especially when entrepreneurs are just starting out, it can be tempting to bend the rules for friends and family. Whether in an attempt to get the ball rolling with new customers or to win their favor, this is rarely a good idea. You’re a business owner, and that means respecting your practice enough to stand by your prices, terms, and expectations.

Friends and family might pester you for discounts or special treatment. If so, gently remind them that you’d rather be professional and treat all customers equally. Bending over backward to please friends can create strenuous expectations. It can also eventually hurt your business’s bottom line and possibly even its reputation.

2. Learn to Listen Like an Entrepreneur

When your friends vent to you about a problem they’re having, you likely lend them an ear, offering companionship and support. However, when your friends purchase from you as a business owner and provide feedback, you need to listen like an entrepreneur.

Listening like an entrepreneur means being open to the feedback your friends provide regarding your business. All without letting it destroy your friendship, confidence, or motivation to succeed. Success as a business owner doesn’t come without its fair share of rejection and disappointment along the way. Try not to take feedback personally, and instead, listen as a professional whose ultimate goal is customer satisfaction and retention.

3. Take Your Business Seriously

It’s important to remember that your business deserves respect. Friends or family members who don’t adhere to boundaries or won’t respectfully communicate are not a good fit as a customer or as business partners. 

You are your best advocate – establish clear expectations with loved ones to prevent anyone from overstepping. Remember, it’s perfectly acceptable to decline a request to mix friendship and business if it feels uncomfortable or inappropriate.

4. Give Friends and Family Have the Freedom to Do Business Elsewhere

One of the challenges for new entrepreneurs and business owners is the expectation that their friends and family will do business with them only as a way of support. While it is good to have friends support your business, they should never be required to do business with you.

When business owners expect everyone in their circle to do business with them exclusively, it puts pressure on those individuals. They end up doing business with their friend out of obligation and not because the product or service is exceptional. This often causes distance between the friends as it can be awkward for both parties.

As an entrepreneur, you should not expect your circle to do business with you because of the relationship. Yes, you can offer things like discounts or perks. However, you need to be okay with your friends’ right to choose where they spend their money and who they choose to do business with.



If you do choose to do business with a friend, you must have a strong relationship with that person. You need to be able to trust them, depend on them, provide and receive feedback from them. You also need to be able to disagree with them. If a single argument blown out of proportion could put your relationship at risk, then it’s likely not strong enough to survive the world of business. Mixing friendship and business doesn’t have to end in disaster. With effective communication, clear boundaries, and proper planning, it can be the beginning of many great things.

Also read:

How to Say “No” to a Friend Who Wants to Join Your Business

How to Start a Business with Friends

Here’s How to End a Business Partnership with a Friend

Should You Go Into Business Alone or With a Partner?

Ari Bratsis
Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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