5 things friends should discuss before starting a business together
By Cynthia Lodite, September 4, 2026Starting a business with a close friend can seem like a great idea. You already trust each other, understand one another and may even have complementary skills.
However, friendship and business do not always mix easily. Money problems, disagreements over responsibilities or different expectations can put even the strongest friendship under pressure.
Before putting your money and friendship on the line, have an honest conversation about these five things.
1. How much will each person contribute?
Be clear about how much money, equipment, skills or other resources each person will bring into the business.
Do not assume that because you are friends, everything will automatically be shared equally. Agree on each person’s contribution and put it in writing.
This can help prevent disagreements later, especially if one person feels they have contributed more than the other.
2. Who will do what?
A business needs clear responsibilities. Discuss who will handle finances, purchasing, marketing, customer service, operations and other daily tasks.
If one friend will work full-time while the other is only involved occasionally, agree on how that will affect ownership, salaries or profits.
Clear roles can prevent the common problem of one partner feeling like they are doing all the work.
3. How will you share profits and losses?
Money can quickly test a friendship. Decide in advance how profits will be shared and how you will handle losses.
You should also agree on whether some profits will be reinvested into the business instead of being taken home.
Most importantly, do not rely on verbal promises. Have a written agreement that clearly outlines the financial arrangement.
4. What happens when you disagree?
Even the best friends will not agree on everything. Before starting the business, discuss how major decisions will be made.
Will you both need to agree before taking a loan, hiring employees or making a major purchase? What happens if one person wants to expand while the other wants to remain small?
Having a plan for disagreements can make it easier to separate business decisions from personal feelings.
5. What happens if one friend wants out?
This is a conversation many friends avoid, but it is one of the most important.
Discuss what happens if one partner wants to leave, needs their money back, moves away or can no longer participate in the business.
Agree on how their share will be valued and whether the remaining partner will have the first option to buy them out.