Don’t Hire Your Friends: The Expensive Business Lesson I Had to Learn

Hiring a friend sounds like a great idea.

You already trust them. You know their character. You know their family. You may have known them for years, maybe decades.

What could go wrong?

For me, quite a bit.

Over 25 years of building and running businesses, I hired a number of friends. Many were incredibly smart, talented, hardworking people whom I trusted completely.

Some of those decisions cost me money. Some cost me clients. Some hurt company culture and caused good employees to leave.

But the biggest cost was losing friendships that had once meant a great deal to me.

In this solo episode of The Equine Business Edge, I share some of those stories, where I went wrong as the employer, and why I’ve reached the point where my default answer to hiring a friend is pretty simple:

I wouldn’t do it.

Episode Timeline

00:00 — Welcome to The Equine Business Edge
Why EquineRevShare exists and how horse professionals can earn commissions from product recommendations they’re already making.

01:10 — Why I’m Talking About Hiring Friends
A 60-second business lesson and a conversation with my wife led me to revisit one of the most expensive lessons of my career.

02:19 — The Real Cost of Hiring Friends
Lost revenue, lost clients, damaged culture, lost progress — and, most painfully, lost friendships.

03:15 — Trust Is Not the Same Thing as Fit
Trusting someone personally doesn’t mean they have the skills, temperament, ambition, judgment or leadership ability required for the job.

04:35 — Why Familiar People Feel Safer to Hire
The danger of hiring someone because you know their character, they’re available, or you believe they won’t screw you over.

05:30 — Was I Hiring People Who Felt Safe to Lead?
One of my biggest realizations: sometimes I wasn’t hiring the best person I could find. I was hiring someone I felt comfortable leading.

06:20 — Hiring People Smarter Than You Can Be Uncomfortable
Great hires may challenge your leadership, question your thinking and force you to become a better leader.

07:00 — The Friend I Hired Twice
The story of hiring one of my closest friends, first at another company and later at the business I founded.

08:15 — Going From College Friends to Employer and Employee
Why it can be incredibly difficult for a friendship — and the people surrounding that friendship — to adjust when one person suddenly becomes the boss.

09:10 — When Your Personal and Professional Lives Are Completely Intertwined
Church, dinner groups, family relationships and work all overlapped. We never discussed what would happen to those relationships if employment didn’t work out.

10:00 — Having to Fire a Close Friend
The work wasn’t getting done, expectations weren’t being met, and eventually I had to make one of the toughest decisions I’d made as a business owner.

11:30 — Why I Hired Him Again
Years later, we discussed what went wrong, believed we’d learned from it, and tried working together again.

12:00 — The Problem: I Wanted a Mini-Me
What I needed from the position wasn’t actually who my friend was — and that wasn’t his fault.

13:00 — Hiring for Comfort Instead of Capability
I began recognizing a pattern: familiar people felt safer than people who might be more ambitious, more capable or more challenging to lead.

13:52 — Friendship Can Create an Unfair Dynamic on Both Sides
Friends can take liberties as employees — but employers can also take liberties with friends that they would never take with another employee.

15:00 — Becoming the Villain in Someone Else’s Story
No matter how much you’ve done for employees, when the relationship ends, you may still become the villain in their version of what happened.

16:14 — Friendship Makes Accountability Messy
When an employee misses expectations, you’re their boss. When a friend misses expectations, you’re suddenly trying to manage two relationships simultaneously.

17:00 — Special Treatment Works Both Ways
Sometimes I tolerated behavior from friends that I wouldn’t tolerate from another employee. Other times I expected more from them precisely because they were my friends.

18:38 — The Acquisition That Cost Me Dearly
The story of acquiring a struggling friend’s company — a decision that ultimately cost friendship, company culture, clients and revenue.

19:15 — Trying to Save Someone Isn’t a Business Strategy
I believed I could bring my friend’s company into mine, teach him our methods and turn things around. The arrogance was believing I could change him.

20:39 — Business Owners Don’t Always Make Great Employees
Going from owning a business to working for someone else can be an extremely difficult transition.

21:15 — When Leadership Trust Breaks Down
Confidential leadership conversations began reaching employees, processes weren’t followed, and a serious client mistake occurred.

22:00 — The Organizational Damage Was Worse Than the Money
A client lost hundreds of thousands of dollars, but the deeper damage was employees losing confidence in leadership. Eventually, we lost nearly half the staff.

22:58 — Compassion Is Not a Hiring Strategy
Wanting to help someone you love is understandable. That doesn’t mean giving them a job is the right way to help.

24:00 — You Don’t Actually Know Your Friend Professionally
You can know someone for 20 years and still have no idea what they’re like as your employee.

24:59 — What You Don’t Know Until You Work Together
How do they respond to authority? Handle pressure? Meet deadlines? Accept feedback? Maintain confidentiality? Support decisions they disagree with?

26:00 — Why Culture Matters Even in a Tiny Company
Culture isn’t something only large companies need to worry about. It affects how your company grows, how much freedom you have and what your business becomes known for.

27:20 — Familiarity Can Create Entitlement
Being close to the owner can create perceived power and special status inside an organization.

28:15 — When Friendship Creates Dangerous Boundaries
An example from another business owner whose trusted friend handled accounting — and ultimately embezzled from them.

29:37 — The Right Hire Might Actually Scare You
The best person may be smarter, more ambitious, more creative or a bigger thinker than you — and hiring that person may require you to become a better leader.

30:10 — Even When Employment Works, You Can Lose the Friendship
Your friend can be excellent at their job and the friendship can still disappear as careers, companies and circumstances change.

31:00 — My Rule Today
My rule isn’t literally “never hire a friend.” It’s this: Never allow friendship to be the reason you hire someone.

32:02 — Two Questions Every Business Owner Should Ask

Before hiring:

“If I met this person yesterday, and all I had was their resume, experience and interview, would I still hire them?”

After hiring:

“If this person wasn’t my friend, would I tolerate what I’m tolerating now?”

If the answer is no, you’ve probably identified the problem.

32:45 — Why My Answer Today Is Still: Don’t Do It
As I’ve gotten older, I’ve realized how difficult great friendships are to find and maintain. I’m no longer willing to risk one unnecessarily for a business relationship.

33:20 — The Friend Who Refused to Work With Me
One close friend repeatedly refused opportunities for us to work together because he valued our friendship too much to risk changing it with money.

34:00 — Once You Sign the Check, Everything Changes
When you become someone’s employer, you’re no longer simply their friend. Compensation, authority, performance and accountability enter the relationship.

34:27 — What Hiring Friends Ultimately Cost Me
I’ve lost money, employees, clients, company culture and business growth because I hired friends.

But most importantly, I’ve lost relationships that mattered to me.

35:20 — If You’re Still Going to Hire Your Friend
Start with the end in mind. Discuss what happens if the relationship doesn’t work professionally before employment ever begins.

36:52 — Put the Expectations in Writing
Create a position agreement. Define the job, performance expectations, reviews, compensation, raises, discipline and even what happens if you eventually need to fire them.

38:00 — 25 Years of Business Lessons
Have you successfully hired a friend? What made it work? Or did you have a disaster? Share what you learned.

38:40 — Why EquineRevShare Exists
Horse professionals drive enormous amounts of purchasing behavior in the equine industry. EquineRevShare helps you earn commissions from the recommendations and product links you’re already sharing with clients.

39:18 — Another Revenue Stream Without Another Horse or Client
Rather than adding another horse, lesson or client to generate more revenue, EquineRevShare gives horse professionals another way to monetize the influence and knowledge they already have.

The Biggest Lessons

Trust is not the same thing as fit.

Someone can be an extraordinary friend and completely wrong for a particular position.

Compassion isn’t a hiring strategy.

Wanting to help someone doesn’t automatically mean employing them is the best way to do it.

Friendship makes accountability complicated.

You may tolerate too much because they’re your friend — or demand too much because you trust them.

You don’t necessarily know your friend professionally.

Twenty years of friendship doesn’t tell you how someone handles deadlines, pressure, authority, feedback or accountability.

The right hire may make you uncomfortable.

Someone smarter, more ambitious or more capable may force you to become a stronger leader. That’s often exactly what your company needs.

And finally:

A great friendship may be worth protecting from business altogether.

I’ve learned that lesson the expensive way.

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About EquineRevShare

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You’re telling them what tack to buy, what supplements you use, what equipment they need and what products could help them accomplish their goals.

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Visit EquineRevShare.com to learn more.

Join the Conversation

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Share what made it work, what went wrong, or what you would do differently today.

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