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When Friends Turn Into Business Partners: The Case for Building Businesses with Friends

colleagues enjoying beer and pizza after work

In a nutshell: Most entrepreneurs aren’t keen on blending business and friendship. It’s always been easier separating the money-making activities from the rest of your life. But if you’re serious about putting profit and purpose together, you’ll soon realize that business is personal and the personal will seep into business. By communicating honestly, being open to compromise, and being of service to your team and not just to your customers, business owners can successfully navigate the complexities of putting business and friendship together.

Where do two fat kids who become best friends in gym class end up after junior high? Most of the time, they grow up and fall apart. But on rare occasions, they end up building an ice cream empire.

Ben Cohen and Jerry Greenfield were the fattest, slowest kids in gym class. Their words, not ours. Jerry passed out, and that’s how he caught Ben’s eye. Since then, Ben and Jerry formed a bond that became the foundation for one of the world’s most lovable ice cream brands.

It’s not easy building a highly successful business with someone you’ve been best friends with since middle school. There’s a reason many entrepreneurs shy away from doing business with people they have close, personal relationships with. Things can get tricky if you’re not careful.

But Ben and Jerry have always had each other’s back since day one. They’re the perfect proof that, yes, you can mix business with friendship. One time, Jerry slipped and fell. What did Ben do? He didn’t put his hand out to pull Jerry up. Instead, he sat on the floor and lay down next to Jerry until he felt better.

“What’s my definition of the word ‘friend’? That’s easy: Ben. About a week ago, I fell down, hit my head, and gashed myself before a concert. I was on the floor, and Ben, being the good friend that he is, came and lay down on the floor next to me while I was recouping. It wasn’t like, ‘Are you okay? Can I help you?’ It was like, ‘I’m gonna lie down right with you.’” - Jerry Greenfield

This is the kind of friendship that survives personal upheavals. These kinds of friends will be there for you through the rockiest periods of your life, whether it’s a breakup, a loss of income, or the death of a loved one.

But even the staunchest of friendships don’t often survive the precariously impersonal nature of business.

Why most people don’t do business with friends

It’s not surprising why many entrepreneurs are wary of doing business with friends. Like oil and water, they don’t mix, unless you're smart and use an emulsifier.

The problem with mixing business and friendship is that friendship depends on the existence of a specific person. You choose who you want to be friends with. Once you lose that friend, you cannot simply find someone else to replace them. If Ben hadn’t found Jerry that fateful day in junior high when Jerry passed out, it probably would be a sadder world without a tub of Cherry Garcia to dig into.

The fact of the matter is it’s not easy replacing people you’ve had a personal relationship with. But when you lose a business partner, colleague, or client, you'll find it easier to move on and find someone else to fill the void.

That’s because many relationships founded on nothing more than economic gain are easier to manage when both parties achieve their goals without having to worry about what their colleagues may be experiencing in their personal lives. Business in itself is complicated enough. When you have to bring the complexities of friendship into the mix, it can tie you up in knots.

Perhaps we can look back at the Age of Enlightenment to explain why many people think it’s best to keep business and friendship strictly separate from each other.

The intellectual revolution of the 17th and 18th centuries set the stage for modern-day commercialization as Adam Smith’s free markets set the stage for capitalism.

Before that, people formed relationships—even their most intimate ones such as husband and wife—with full consideration of the economic and political gains they could reap from the partnership. Think of noble families marrying into other families of similar stature so they can expand their wealth and influence. For centuries, that was how marriage always worked in high society.

But when free markets took over, people realized they could form relationships purely for achieving economic ends, such as employer-employee, investor-investee, or vendor-customer, without having to be intimate with the people they were in a relationship with.

By the same token, they realized they were also free to build deeper, more complex, personal relationships that had nothing to do with their economic or political interests. And perhaps they discovered that compartmentalizing their interests made relationships a lot less complicated than they used to be. And so, people began separating business from their personal lives.

It’s not personal—it’s strictly business

Entrepreneurs have always been told to get out there to network and make connections, but there’s an obvious line between networking and making friends. The former is done to form strategic partnerships to advance the goals of your business.

Think of it like an arranged marriage—you’re only entering the relationship because you’re going to gain something out of it, likely an economic or political advantage. The end goal is to find a partner who’s beneficial for your bank account, but you still cross your fingers and hope you end up liking the spouse arranged for you. It’s exactly what the noble families of old did.

Friendships, on the other hand, are formed because you like the person you want to be friends with. You may not make money or gain political favors from making friends, but you’re happy having them around. And that counts for something.

Many people think mixing business and friendship is risky. Friendships change over time simply because people change over time. And, often, difficult issues such as funding or changing roles can compel business partners to put aside their friendships to prioritize the needs of their business.

Many business owners have made it their guiding light the maxim that The Godfather’s Michael Corleone lived by: “It’s not personal—it’s strictly business.” But it sure didn’t feel like it was strictly business when Steve Wozniak had a falling out with Steve Jobs, or when Eduardo Saverin, Mark Zuckerberg’s college best friend, sued Facebook to have his shares and co-founder status given back.

Online—where the lines are blurred between the professional and personal—it’s in your best interest to start going deep and personal with the people you do business with. We’re positive Ben & Jerry’s close-knit founders would agree.

“We chose to make our friendship the most important thing. It really helps to have a solid friendship with whoever you are doing it with before you start the business.” - Ben Cohen

The perils of ungrounded friendships in business

While friendships rooted in mutual trust, respect, and affection can make dealing with the stresses of business easier, challenging business situations can be more difficult to manage with close friends.

If you don’t have proper boundaries set up, being business partners with your friends may compromise the integrity of your business decisions. This could lead to nepotism or cronyism or create conflict between your business goals and friendships, such as when you and your friend do not see eye-to-eye on a crucial business decision.

Friendship may also create tension if there is an unspoken expectation of exclusivity. This tension could lead to friction that wouldn’t have been there had you kept business and friendship separate from each other.

Even Shakespeare would rather lend money to an enemy than to a friend. In the words of the world's greatest English poet, “If he break, thou mayst with better face exact the penalty.”

But to Beusail Academy co-founders and CEOs Natalie Nichols and Tamara Loehr, friendships in business could be some of your best assets. Natalie and Tamara have been good friends for a long time. As heart-centered leaders, they go out of their way to ensure that everyone feels that they belong and that a culture of building friendships within their professional teams is cultivated and nurtured.

“These relationships can turn into some of your most valuable, whether it’s for opportunities or support when times get tough." - Natalie Nichols

The need for friends in business

Here’s why you should do business with friends: It’s the best way to develop trust, understanding, and empathy among your colleagues, employees, and partners.

Friends are important in business because their presence facilitates processes and transactions that may be more challenging to initiate or sustain if you were operating solely based on your contracts.

Opportunities, for instance, are easier to come by if you have a robust network of friends. The exchange of ideas and opinions also happens faster among friends who care for one another’s success than among partners and colleagues held at arm’s length.

Take a look at the historic shipbuilding site on the River Clyde in Scotland. Brothers, cousins, and friends who owned and operated various companies built an informal community that encouraged the flow of shipbuilding knowledge among themselves. The free flow of ideas led the River Clyde shipbuilding industry to stay on top of its game for centuries until WWII.

Friendships like these can provide a healthier support system for everyone involved. The ease of communication among friends can help you create a more inclusive culture, boost employee morale, and improve efficiency, productivity, and revenue.

“You may be able to get to $1 million in revenue on your own, but it’s a lot of hard work. Getting to $10 million and beyond is not possible without the collective efforts of your entire team.” - Tamara Loehr

Who to connect with

As a business leader, seek out friendships throughout the entire organization. No one is a priority. Everyone carries weight.

It’s essential to build friendships with those on your executive team, but it’s just as important to be friends with people on the lower rungs of the ladder that you may not necessarily be working directly with. Make an effort to get to know everyone in your company, not just the people at the top.

These people will offer you different points of view and help you see your business through different lenses. You don’t have to invite everyone to lunch or drinks after work. You can learn a lot just by speaking with people one-on-one or stopping by their office for a short chat during the day.

Don’t just limit the talk to work insights. Get to know everyone on a personal level, often steering the conversation to topics that allow you to get a feel for their interests, values, and personal goals.

"Create a safe space where your team feels a strong sense of belonging. It makes being a CEO an enriched experience. For them, we trust their journey is an enjoyable one, with great value enough so that they stick by you even in the tough times," says Natalie.

How to make and keep friends in business

Building friendships at work with purpose at its core is vital for your success. This can be challenging for CEOs, founders, and other people in positions of authority because you often find yourself with little time left over after work.

You can work with friends in business by making friendship a priority. Scheduling lunch or drinks, attending community events, and taking a real interest in what's happening in your colleagues’ lives can help ease formal business relationships into friendships.

But also allow yourself to be more authentic. When you let the aspects of yourself that you normally reserve for close friends and family come out during work, your team will appreciate you all the more for it.

As a business leader on top of your game, you may suffer the impression that you’re distant or cold, except to colleagues you’ve been friends with for a while.

But when you’re comfortable showing your colleagues and team members parts of your personality that everyone can relate to, it goes a long way in building and nurturing strong bonds that help keep the entire team together.

"When you switch your mindset to being of service to your team, not just your customers or clients, work and growth naturally evolve for everyone." - Tamara Loehr

Compromise will also be inevitable, as long as it’s not your core values that you are putting in jeopardy.

Ben and Jerry, for example, agreed to have veto power which they can use when they feel “very, very strongly” about a certain decision. It’s this compromise that helped the two weather the storms of founding, growing, and selling a business.

Admittedly, they use their veto power very, very rarely. Ben and Jerry fought only once—over the size of the chunks in their ice cream. Visionary Ben wanted bigger chunks, but Jerry, the numbers guy, didn’t think so. (If you’re curious, customer feedback later proved Ben to be right all along.)

“The way we worked, whoever felt the most strongly about it got their way,” Ben says.

The more effort you put into staying connected, especially with the people on your team, the more meaningful your relationships with them become. Honest communication and a willingness to listen to what the other has to say are the emulsifiers that bind business and friendship together.

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