The pros and cons of hiring friends to work for your business

When it comes time to bring on new staff, every business owner is tempted to hire amongst their friendship circle, but is that really a good idea? Alex Tselios, founder and publisher of The Big Smoke, explores the ups and downs of hiring friends to work for your business.

For many years, I was told that I should absolutely never hire or work with friends. I no longer hear this.

Maybe it’s because three years into launching my company, I’d had most of my close friends work on it with me. And for those who were not my friends prior to working with us, I now consider them close friends.

How does this work? Ultimately it comes down to personality traits, boundaries and figuring out how everyone fits into this model together.

Hiring friends for your business: expectation vs reality

Not every friend I have gone into business with has worked out. In fact, one of my dearest friends left a business I started and I was devastated, only to discover that it was the best thing that ever happened to me. They didn’t understand the complexities of funding and sustaining a company from startup to growth, nor governance, and the company thrived without them.

Other friends I have tried to include in business ventures simply did not have the tolerance levels to deal with the stresses involved in startups. To understand this, rather than resent them, allows you to cut ties quickly (business-related, not personal) with very little damage – because hey, they tried! 

Hiring friends for your business requires good strategy to work

Trying to hold onto the wrong people for the sake of the friendship is always a mistake. The business suffers and resentment builds, which is never healthy for a friendship.

Personally, my company would not have succeeded at all had I not accepted that not every mate is right to work with, or will be as motivated as I am about the vision. Instead, I have learnt that it is less about who says they are excited, and more about who has the capabilities and willingness to contribute, take ownership and demonstrate endurance.

Without the ability to discern this as you lead your company, you simply cannot choose which friends are best to work with in a business capacity.

When it’s good, it’s great

One of my favourite aspects of working with friends is pushing them to be open to other opportunities within the business as it grows. They may not realise they are capable of certain things, but often I can identify it in the early stages.

Recently, we broadened our core offerings which required an expansion of resources and my team not only stepped up to the challenge, but have discovered that they are passionate about skill sets they didn’t realise they had. One team member in particular, I sensed would be brilliant in dealing with a particular area and stakeholder, as she had always been almost a brand evangelist for years. She was initially hesitant about taking on this particular role so I didn’t push (or at least I tried to be less pushy than I normally am). Instead, I asked her to trust me to try this and to give it time. Within weeks she was glowing with excitement – she loves doing this new role and is brilliant at it.

Another teammate (and a very old friend of mine) has worked faithfully with us since the first month of launching, and he also recently expanded into other parts of our operations, in areas he never expected to enjoy or excel in. It is exciting times.

Working with friends is not always perfect, but despite the faults, it’s far more preferable than working with those who you have zero connection with. But, some stay the road and some can’t.

Isn’t it harder to direct or discipline friends?

I don’t feel any less inclined to enforce boundaries, or be firm about outcomes just because they are people I consider my friends.

In fact, quite the opposite. I am even clearer about expectations and outcomes, no feelings spared and no feelings hurt if it doesn’t work out. Because they are my friends, they are more likely to get me and my (at times) bluntness without feeling offended, or taking it personally.

We communicate, we work out what went wrong and what we could have done better.

My team knows we are all in this together. And if an individual can’t hack the stress and expectations then they can leave, that is fine too.

Ultimately, I want to build with the right people. It just so happens, my work and personal life blend, so I therefore also want to do life with the right people. Because of this, I am proud to be building an impactful company with friends who have become like family.

My second in charge, Mathew, says we are like the Mafia. I guess he is onto something, minus the danger or excellent tailoring, but we are just as effective at getting the job done and having each others’ backs. I could not build this without the team that make this vision a reality.

Lessons learned

1) Discernment

You cannot work with all friends, as many people won’t have the same vision or be in the same place as you in life to help you create a meaningful company. Work that out pretty quickly, and don’t hold onto the wrong people.

2) Be clear about vested equity, and expectations

At the beginning you want to share equity equally – often that is a mistake and one I have made in the past. Just because they are your friends does not mean they will pull their weight, meet expectations, or be motivated to sustain during the tough times.

Be clear about what you require from their involvement in the company and over what period of time. Protect the company first and foremost, and allow it the opportunity to truly scale.

3) Encourage, but don’t resent when they cannot deliver

I have seen abilities in my friends they may not initially see in themselves. Once I provide them with an opportunity, they may absolutely flourish, and rethink how they see their own skill set. Others may feel  pressure, and not enjoy the stress – and never will.

I don’t believe in forcing people to fit into the role you envisioned them to have. Sometimes the timing is wrong or the goals are no longer aligned.

Instead of putting pressure on a personal friendship, it is better to accept it won’t work. Don’t feel bad about cutting them out either, if their involvement hinders your company’s growth, the friendship is irrelevant – they have to leave.

This post was originally published in 2016 and has been updated for 2022.

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