The rules for launching a New York business with a friend

Going into business with a friend can be tricky but incredibly beneficial for people who know how to play by the rules.

According to the New York Small Business Development Center, about 99 percent of the companies across the state are actually small businesses. This can be encouraging for entrepreneurs looking to launch a business. In fact, the center also points out that New York is one of the most entrepreneurial states in the country.

Some people will choose to go into business with a friend. This can be advantageous, as the parties already know each other well and have a good relationship. However, a recent report from CNBC states that people who fail to follow the unwritten rules of partnerships listed below could be playing with fire.

Enjoy it

Starting a business is time-consuming and can be stressful. People who are friends prior to opening the company should find ways to still enjoy their relationship outside of work, as CNBC notes. Taking time to do activities that have nothing to do with the business can keep the friendship alive.

Address controversies immediately

CNBC points to a story of two women who were longtime friends and launched an instructional painting company where people could enjoy a glass of wine as they created art. Not long after they opened, they had a misunderstanding but did not address it immediately. This resulted in a bigger dispute.

The friends quickly learned that confronting differences immediately is better, both for their relationship and the business. One of the women stated that even though it can be difficult to disagree, having an honest conversation right away is the best policy.

Enlist third-party help

CNBC states that business experts advise that friends who run companies together can benefit from using a third party when disagreements occur. In fact, it can prevent a company from going under when the partners are deadlocked over an issue. The third party could include a mentor, mediator or a board of advisors.

Learn how to work together

For some people, a friendly relationship may not translate well into a working relationship. Those involved need to know how to collaborate as a team in order to succeed. Listening to each other and respecting each other is key to running the company.

Learn how to be apart

Friends who run a business may find they spend a lot of time together, which can be taxing on the individual and eventually factor into the professional relationship. CNBC points out that taking time apart can give each person some much-needed breathing room.

Forming a business is hard work and requires the help of professionals who understand the legal implications of a partnership or other entity. Anyone who has questions about this issue should speak with a business law attorney in New York.