The old adage that one should never mix business with pleasure is rather tired, and should not be taken as gospel. Running a business with friends — including retail businesses — has as much chance of being a revelation as it does a disaster.

The first key to making it work is ensuring that, as with any other business decision, you enter into the partnership with a clear head and agreed shared objectives.

The process of entering into business with a friend needn‘t be dissimilar to entering into it with a stranger. Someone will not necessarily be a good match for you as a business partner by virtue of being your friend, and you must be impartial and transparent when deciding whether it can work. 

If you know you are not compatible as business partners then you must treat your friend and yourself with honesty. There are countless tales of friendships being forever tarnished by a business, and you don‘t want to find yourself in a position where you are faced with a choice between losing an important friendship and risking your business.

I have personal experience of this. In the past I brought a good friend of mine into a business of which I was chief executive. After a while, it became clear that he simply wasn‘t up to the job in hand and I had no option but to let him go. That was 17 years ago and we have never spoken since. While I regret losing him as a friend I know that it was the right decision for the business.

But while there are always risks, friends can be a reassuring presence in tumultuous times. I am currently in business with friends for the second time and know just how effective it can be. 

Peter Ellis and I worked together at the Early Learning Centre successfully before selling the brand in 2004. Our next step was to go into business with another friend, Chris Ward, to found Christopher Ward watches.

Together, we launched Christopher Ward in 2004 as an online-only retail model – an approach that was innovative in the world of retail, particularly for the watch industry – but that still posed considerable risk. Making such decisions is easier when you have people you trust implicitly around you.

The secret to our success is that we all bring different skills to the business that complement each other. 

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Peter takes care of the financial side of the retail business, a role he also fulfilled at the Early Learning Centre, while Chris heads up sales and I concentrate on strategy and marketing. It all works very well.

You need to be able to quickly establish the direction you see yourselves and your company heading in. What is your five-year plan? Your 10-year plan? How are you getting there? If these are issues you don‘t agree before entering into business, the problems will only exacerbate as time goes on. 

Next you must be clear on your roles. The best partnerships and the best friendships come about when two people complement each other‘s personality and skill-set. One of you may be better suited to the hands-on running of the business, another may be a good public face who enjoys the marketing side of the business. Know each other‘s strengths and play to them. 

It also helps to have worked together previously. How you behave in a pressurised working environment does not necessarily correlate with how you behave in your leisure time. Having some idea of what awaits when you are working together will prepare you better.

Once you have entered business it is imperative that you are transparent and candid with each other. This is an area where working with friends has potentially huge benefits. You can be honest with each other in a way you would not be with a stranger, and you can bounce off each other‘s ideas. With concern