Shall i go into bussiness with my best mate?

Question

My best mate wants me to go halves on a new business he wants to start (he already owns and runs a restaraunt).
It would mean remortgaging the house and going into a business of which i have no experience whatsoever.
SCARY SCARY SCARY

Answer 1

I would strongly advise against it.

He's your best mate. I would think your friendship is something special and that you wouldn't want to ruin it. While starting a business is an exciting excursion, with out any experience, is will almost certainly lead to bitterness and disaster.

He owns a business, already, right? Well, let's say there's a big decision to be made. Let's say there are several. And let's say you disagree. Things are almost certainly going to get ugly if he belittles you for no experience and when you feel left out because he's making major decisions.

Or maybe you agree. But, I promise...in no business do the partners always agree. What happens when that tension comes up? What happens if it fails? He has another business, do you have another house?

I'm sure you're very capable because he obviously thought highly enough of you to seek the venture. But running a business takes a LOT of experience.

I would advise even equally experienced friends to be weary before entering a partnership, because friendships are too often destroyed over money.

If you think it's scary, then your confidence is obviously lacking. This is not an issue to be take lightly. You should have no doubt about what you're doing. One out of ten small business ventures fail. What's your recipe for success?

You ask if you should go into business with him. I would absolutely advise against it. You have a lot at stake. But it is, of course, your decision. No matter what you decide, good luck.

Answer 2

The best way to lose . . . . all the way 'round!

DO NOT DO THIS!

First, haven't you heard the saying don't do business with friends or family?

It was "coined" (HA HA HA .... punny) for a reason.

Next, it's NOT your idea. It's his. You've lost control right from the start. Now, if this was your business, and your idea and the start-up would be yours, then it might not feel so scary, scary, scary to you.

Next, do not use your home like a personal bank. PLEASE don't do this.

Next, you admit you have no experience in this business, again NO CONTROL!

You feel at a loss already, and you've not even started this.

Keep your house. And if it means losing the mate, so be it.

I try to teach my son that the secret to life is not only making money, but the REAL secret is learning how to KEEP IT (away from other people!) Money is hard-earned, and too easily lost!

Answer 3

Follow your heart. Your question indicates you have some reservations. I would give this reservations some serious consideration before making a decision.

A business partnership is very much like a marriage. You have to be committed to make it work, it will have a lot of ups and downs and it takes some work and effort to make it last.

The business partnership will also change your friendship. Not necessarily for the worse, but things will be different.

You might want to talk through the reservations with your friend. Let him know exactly what your concerns are and see how he responds to them.

It's possible this is a match made in heaven - but a lot of businesses fail in their first year, just like a lot of marriages do end in divorce.

At the same time, owning your own business is an exciting opportunity. It means a lot of long hours and usually a long wait to see a return on your investment but it also opens to the doors to great accomplisments and busines success.

Good luck with your decision.

Answer 4

This could test your (platonic) relationship with your friend, if you say no, you need a good reason. But if he's a good friend he will understand.

Anyway, just because you have no experience in the industry doesn't mean you have nothing to offer. Make a list of what you are good at, and what you enjoy. Get help with this because most people don't really appreciate how skilled they are.

A lot of skills required in a restaurant can be picked up really quickly, like waiting and washing up. Not glamourous but if you are just starting out there is no room for pride.

Personality traits have their place too, some people are good with customers, other people have the confidence to bargain effectively with suppliers, yet others have a natural sense of style which is very important with the interior decoration and the presentation of meals.

Hope this helps

Answer 5

I'd be concerned. The restaurant business is notoriously fickle; you should seek the advice of an accountant and check the books thoroughly. Why does your friend need your money? Is his business going under? Does he need money for expansion plans but cannot secure a loan himself perhaps because he has defaulted on his own repayments? Remember as a partner in a business you will be equally liable for any debts incurred. And above all, will you really be able to sleep at nights having remortgaged your home? Will the business be able to generate enough profits to pay both of you a good return? Gut reaction: it sounds fishy to me.

Answer 6

If he already has an established business than he has the formula already to make it work. You just have to duplicate his success. However the scary thing about doing business with relatives or friends is if something goes terribly wrong, you not just loose a business but a relationship.

If you were both starting out a new business without experience, I would say it is relationship and financial suicide. In your scenario I would be more comfortable with.

Answer 7

You need to do some research first before you jump into anything you are not familiar with. Maybe these are some questions you can look into. 1. Is the business profitable? 2. If the business goes under, are you willing to lose everything including your house?
If you don't want to do it, don't be pressured into it. I wouldn't go into business with a good friend, bcuz it will change your relationship drastically. Especially if you have no knowledge or experience of the business. Your inexperience will allow you to be suckered.

Answer 8

Think very carefully before committing yourself. Running your own (shared) business is very stressful (especially in the restaurant trade). What happens if you disagree on how the business should move forward in the future?

Also think about the legal aspect. Get all the paperwork you need written up by a solicitor. It is an extra expense you may feel you don't need right now, but it may well save your skin in the future if anything goes wrong.

Answer 9

See how he runs his other business, see how he treats his employees, check out his financial records, and get busy getting information on the things you do not know about the business that he wants you to get into. If he gets all weird about you doing all these things, then I would call that a RED flag and would pass on the offer. If he is on the up and up. He will be more than happy to make you feel at ease, If not then I would decline. Good Luck mate!!!!!!!!

Answer 10

I would definitely think twice about doing business with a friend. Last year I opened a PR firm with two great friends of mine. In the beginning it was great, through the idea and concept stages but one of my partners had no idea about the business, and the other one didn't understand the concept of partners and that she wasn't the owner. Needless to say one of the partners and I left the business to the partner who wanted total control and luckily we are still all friends. I've seen too many cases where it didn't work out and good friends became enemies.