When we were starting Cobalt & Sapphire, we can’t tell you how many people gently suggested that friendship and business shouldn’t be intertwined. If you are thinking about going into business with a friend, like we did, I’m sure you’ve heard every story under the sun about business tearing a friendship apart, or one friend screwing over the other. It’s enough to make you really think about if it’s worth it, and to us, it was…but with the proper precautions put into place. 

We’ve been in business for almost 3 years together and Cobalt & Sapphire hasn’t once interfered with our friendship. If anything, it’s made it stronger. We understand this isn’t always the case, so here’s our tips on going into business with a friend:

The point of going into a partnership rather than a sole proprietorship is to benefit from the value you each add to the business. If one person adds all the value, is it really fair to have to share the profits? So really take the time to think about the value you each bring before making your decision. Maybe one person has the capital to put down and the other the talent. Or one has an engineering background and the other has business acumen. 

Our partnership made sense because our skill set and way of thinking, while similar, were different from one anothers. We both have a marketing background, but one of us comes from a strategy role while the other from a creative one. We knew that without the other, this business wouldn’t have the competitive advantage it has. Together, we’re the full package. Don’t just commit to going into business with each other because it “will be fun”. Make sure you both have something to contribute.

Before we even purchased our business domain, the first thing we did was put together an operating agreement outlining the terms of our partnership. This is extremely important to do right at the beginning because if you don’t, you’ll probably put it off thinking nothing can come between the two of you…until it does. In a nutshell, this document outlines the business’ financial and functional decisions, and once signed is an official contract binding the two of you to its terms. This protects your percentage of the business, your voting power, and outlines your duty in the business. In other words, it protects you and your partner and gets you both on the same page.

As hard as it may be to take your best friend hat off and put your co-owner hat on, sometimes it is necessary, especially when making business decisions and giving each other feedback. Don’t be afraid to say something that may upset your friend, but better your business. The key is to say it in a constructive way and not to make it personal. If your partner can’t handle the honest/constructive feedback, that my friend is your first red flag and you should get out of business with that person. Operating a business requires making difficult decisions that you need to separate emotions from.

Piggybacking off of our last tip, make time to put your best friend hat on while keeping the co-owner hat off. You guys were friends first and you need to dedicate time to nurture that friendship, not just the partnership. Continue to do the activities you love to do together, to talk about non-work related topics, and experience new things together. If you don’t, your relationship might morph solely into a professional capacity and one of you might start to resent that. What has really worked for us is dedicating 30 minutes (ok sometimes it goes on longer) of our daily morning calls to catching up and being friends before diving into all the work stuff we need to get through.

We hope this blog gave you a lot to think about! Going into business together was the best thing we ever did, but of course that took a lot of thinking and work to get it this way. If you and a friend could go into a business, who would it be and what kind of company would you start? Let us know down below!