Buddy System Can a great college friend prove to be an equally good business partner?

So you're thinking of starting a business with one of yourvery smart, very cool college friends. Maybe he's yourroommate, or perhaps you met her in a business class. It might evenbe a group of your fraternity brothers or sorority sisters who allwant to start a business together. While it sounds like the perfectkind of partnership, is going into business with a college buddy(or buddies) really a good idea?

For the co-founders of Chili Willy's, a quick-serve Mexicanrestaurant in Hamilton, New York, their friendship proved to be aperfect recipe for entrepreneurship. Chris Nordsiek, Preston Burnesand Matt Brown, all 21-year-old students at Colgate University inHamilton, became friends during their freshman year. The threeinitially came up with the restaurant idea for a business plancompetition during their sophomore year. Because Nordsiek, Burnesand Brown have different strengths and skills, going into businesstogether seemed natural for the friends. "For the three of us,our strengths are very different," says Nordsiek. "We allhave a different perspective, and between the three of us, we can[identify] any hole or problem [in the business]." Being inthe same fraternity for a full year before starting the businessalso helped the team really get to know each other.

But partnering with your college friends isn't always asmart idea. Two pitfalls of the strategy are ruining friendshipsand giving friends with shaky credentials key positions in yourcompany. According to Graham Mitchell, director of the Program inEntrepreneurship at Lehigh University in Bethlehem, Pennsylvania,"Clearly, there has to be a good sort of chemistry with peopleon a personal level, and it helps if there's a natural divisionof capabilities and talents."

Working with someone on a class project is one way to get toknow a potential partner better; you'll get a good idea of hisor her strengths, weaknesses and ability to commit to a real-worldbusiness. Choosing someone only because she's your friendisn't wise, so always consider someone's knowledge andbusiness skills as honestly as possible.

Mitchell also suggests studying the partnership dynamics ofother successful entrepreneurs: "Students and young teams needto experience that and be exposed to the ways teams work from atheoretical point of view."

Learning to deal with conflict is key to making any partnershipwork--especially if you're roommates in addition to beingco-founders, like Nordsiek and Burnes. "If two of us aredisagreeing about something, we'll bring in the third guy, andhe'll be the one to make the call or [arbitrate] what'sgoing on," says Nordsiek. "We're not going to stickto our guns and be wrong. We're all rational human beings, andif we sit down and discuss it, we can come up with asolution." Putting ego aside when solving problems isimperative. As Nordsiek says, "We put the success of therestaurant before everything else."

Fine-tuning that communication style took the better part of ayear for the Chili Willy's team. But since opening their doorsin February 2005, the trio has clearly managed to make friendshipand entrepreneurship work hand in hand: First-year sales areprojected to hit $200,000.