Nothing feels better than hiring a friend — someone you know, trust, and can speak bluntly to, right? Nobody imagines when they hire or partner with a friend, they may one day need to fire them, but that’s often the case.
In my experience, hiring friends can lead to the very best, and the very worst, outcomes. If you have the fortitude to weather the latter, it might be well worth the risk. For instance, my fellow co-founder, David Mainiero, has been my best friend since freshman year of college. I can’t imagine running my business without him.
Still, I’ve fired friends a few times before, so I thought I would pass along a step-by-step guide on how to confront what may be every entrepreneur’s worst nightmare.
1. Realize, either way, your friendship is over
Most entrepreneurs I’ve spoken to tell me their biggest concern when firing a friend is that it will jeopardize the relationship. “She won’t forgive me!” Indeed, she may not forgive you. But one thing is certain: if you don’t call it quits when the business relationship clearly isn’t working, it will be you who does not forgive them.
If you are debating whether to fire a friend, chances are your friendship is already over – you just don’t know it yet. Hopefully, your friend will handle their termination with grace and forgiveness, but that’s the exception, not the rule.
2. Focus on the legal realities
Now that you’ve lost your friend, things could get ugly. Make sure you have your legal priorities in order. Oftentimes, when people feel personally invested, they tend to overlook those pesky legal details. But it’s precisely during this time that you should pay close attention. You’d be surprised at the number of legal issues that arise due to personal, rather than business-related, issues.
Read your friend’s employment agreement. If necessary, the operating agreement for your company. If your friend is just an employee, consult an employment lawyer in your state. If they’re a partner, consult an attorney. Be sure to learn your rights, your friend’s rights, and how to ensure the termination is legal and incontestable.
Before your friend has even an inkling that you intend to fire them, you should have your entire approach planned.
3. Schedule an in-person meeting
Much like a break up with a significant other, firing a friend should be done in person. Once you’ve gathered yourself and your legal strategy, it’s time to send an email and set up a place and time to chat.
It will behoove you not to betray your intentions at this meeting. You’ve made up your mind. This is what’s best for your business. If you make it clear you’re coming in guns blazing, you’ll only give them more of an opportunity to prepare.
Remember that self-preservation is human instinct, and if you were in their position, you would also leverage feelings of personal attachment and guilt to keep your job. They will likely do the same, so advanced warning will only make it worse.
4. Be honest and transparent
This is where things get really difficult. You don’t want to hurt your friend’s feelings. Your friend (hopefully) doesn’t want to let you down or lose their job. If you aren’t extremely direct, open and firm, you’ll find yourself in an argument about how you can make things work. But this isn’t the time for an argument; this is the time for separation.
So, muster up all the courage you have, look directly at your friend and say, “I’m going to be completely honest. This isn’t working out, and I don’t believe we can work together. I’m very sorry, and it hurts me to do this.”
Afterward, you may choose to provide examples and justifications. Give your friend the opportunity to vent, ask questions, and generally be angry. If possible, explain how your own shortcomings have contributed to the situation. But don’t lie or sugarcoat it. The correct answer to, “I wasn’t that bad” is not, “I know, I’m just looking for something else.” It’s, “Yes, you were that bad.”
This may seem unduly harsh, but there are only two options from your friend’s perspective. Either a) meet your expectations, or b) you’re a horrible friend who couldn’t give your best friend a break. Trust me, you do not want the latter.
5. Remind your friend it’s not personal
This entire affair means you must remain dispassionate. It’s a difficult thing to do, but necessary. Once it’s clear the business relationship has ended, remind your friend it has nothing to do with your friendship, you hope you can remain friends, and you will help them however you can.
This article has been edited.
Hi, I’m Joel Butterly. I grew up in Vermont, and attended Dartmouth College and Yale Law School. Before I started my companies, I was a competitive boxer, powerlifter, and a certified personal trainer. During my first week of orientation at Yale, I co-founded two companies – InGenius Prep, an admissions consulting company, and Topliff Peak, a real estate company (mixed-use income properties). Connect with @JoelButterly on Twitter.
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