Having an established personal relationship with someone might seem like a good reason to go into business together. You might imagine that starting something with a close friend is a much safer option than doing so with someone you don’t know well.
While some friends do turn out to make great business teams, for others, it goes horribly wrong. Tensions might surface when there is money at stake, even if you have rarely argued about anything before. You might also find that seeing someone socially is very different from seeing them daily and needing to rely on them to support yourself and your family. Business partnerships often go wrong, and a business dispute could potentially destroy your friendship as well as your business.
A business-like relationship can have advantages
Think about your friend group. There are likely some of you who do things that annoy each other at times or make choices that you might not agree with. However, because you are friends, you might not always speak up about these things for fear of damaging the relationship you have or simply because no one else does.
When you go into business with someone with whom you have no personal relationship, you might both find it easier to be more direct. Since the nature of your relationship is transactional and aimed at pushing the business idea forward, you may feel freer to be forthright if you are unhappy about something or if you think the other person is wrong about something.
If things do not work out as well as you planned, ending your relationship may be also simpler, because you can both just go your separate ways. It can also be easier for those around you, as they may feel stuck in the middle if the business partner you have a falling out with is part of the same social circle. Finally, someone from outside your circle may be able to bring a wider range of different experiences than those you know, which could be beneficial.
Whomever you choose as a business partner, it is best to seek legal guidance to document your relationship and handle any partnership disputes that occur.