Friendpreneurs: How to Find Success, Preserve Relationships

When Morehouse buddies Patrick D. Smith and Ozzie E. Smith (no relation) both entered the dental field, it seemed only logical they should start a practice together. Based in Chicago, the Smith & Smith Smile Studio was launched in spring 2007 and opened April 2008. “We initially knew that we would one day want more than to be owners of a small business,” Patrick says. “Working as a team would allow us to collaborate with ideas and knowledge. Also, we figured that as a startup company looking to expand in the future, having two people able to man the ship at any given time gives us more options for future expansion.”

But going into business with a friend can be a risky endeavor. “There is a risk of meshing the business with friends, as now a dispute or difference of opinion not only affects the business relationship, it affects the friendship,” says business consultant Michael D. Brown, author of Fresh Customer Service (Acanthus Publishing; 2008) and CEO of the Michael D. Brown Co. “If not handled properly you can diminish and/or loose both the friendship and the business.”

But there are steps to take to help friends become friendpreneurs.

Agree on a vision for the partnership.

Having a shared vision was the key to the successful partnership between high school friends Candace Sandy and Dawn Marie Daniels. Both entered the publishing field and at one point worked together at Simon & Schuster. Daniels and Sandy had a vision of creating self-help books for African American women. So, they authored one together, Souls of My Sisters: Black Women Break Their Silence, Tell Their Stories and Heal Their Spirits (Kensington Publishing; 2000). Realizing they found a unique niche, they formed Souls of My Sisters Inc. and have produced self-help workshops, published several follow-up books, created an online resource, and inked a publishing imprint deal with Kensington under which they publish self-help and inspirational books by other authors. “What is wonderful about this partnership is that two women can pool together their resources and have an opportunity to provide a service or a product to fill a niche and with the right strategy, hard work, and determination can become the American dream,” notes Sandy, who is also the communications director for Congressman Gregory W. Meeks (D-NY).

Define business roles. “Discuss each person’s strengths and weakness and map out who will do what within the company,” says New York-based business consultant Byron W. Perry,

founder of entrepreneurial workshops Kids Inc. When Kristen Poe Hill and Renee E. Warren formed Noelle-Elaine Media, Hill says it was important that their work styles were similar. In business since 1993, the event management, media relations, and production firm counts such powerhouse companies as Black Enterprise, Ariel Mutual Funds, BET, and L’Oreal as its clients. To stay on the same page, the partners have an annual retreat in addition to their weekly staff meetings.

“Even if we just camp out at one of our homes, we have a strategizing session outside of the office,” says Hill, who recently co-authored You Buy the Peanut Butter, I’ll Get the Bread: The Absolutely True Adventures of Best Friends In Business (Penguin Group; Feb. 2009) with Warren. “This way we can map out our goals and plans for the future and bounce ideas off another without the distractions of the office.”

Talk money. “Figure out what each person is bringing to the table.” Perry says. “Will each invest money, or does one have the contacts and skills?”  For dentist Smith, discussing finances with his partner was easier, he says, because of their friendship.  “Having a business-first attitude allows us to prioritize the money conversations around that in a team

effort,” he adds. “Put it all on the table, from how much money you have in the bank, credit history, family plans, expected income, etc. Don’t let friendship cloud your mind when making business decisions.”

Make it legal. “Devise a solid business plan and agree to a contract,” Brown says. “If there is no initial shareholder agreement and decisions are made on the fly and are inconsistent, this leads to chaos and instability.”

Merge. “Sometimes the best business partnerships with friends develop from businesses that merge,” Perry says. That’s what restaurateurs Joseph Dowell and William Parks discovered. Parks opened Mamma Nems.com in Stone Mountain, Georgia in 2006. Dowell meanwhile operated his own restaurant in New Orleans until it was destroyed by Hurricane Katrina. When Parks, who had no prior no restaurant experience, found himself overwhelmed with running the business, his longtime friend Dowell came onboard as an equal partner.  “I knew my financial investment would go much further in a restaurant that was already up and running verses opening a new one,” says Dowell on his decision to join Mamma Nems. “William and I share similar core values that keep the business strong and on a vision and the basic principles on how to get there.”

Friend time.

In the office, Dowell says it’s important to put business first. “The friendship is separate from how you provide for your family,” he says. Hill and Warren also find while it’s a good idea to give each other space, they make time to socialize as friends outside of work. “At the end of the day, we are still friends. There’s Kirsten my business partner and Kirsten my friend.”

Conflicts and resolution. Emotions can run high when you are in business with a friend. To mount these hurdles, have a plan, Brown says. “Identify the dispute resolution methodology (i.e. Will a third identified person come in and help you solve personal and business disputes?) Decide how you will maintain the friendship if the business doesn’t go well or the business if the friendship doesn’t. Document a “prenuptial scenario agreement. If x happens, this is what will we do,” Brown advises. Compromising is also important, says Noelle-Elaine Media’s Hill. “Renee and I have always been open and honest with each other and that honesty has allowed us to clear any hurdles that may come up.  We do not always agree, but we do always agree to compromise when worse comes to worse.”