One unpleasant situation that business owners can face is the breakup of their business partnership. Sometimes these splits are amicable enough and may be because the company is going in a different direction or shuttering its doors permanently.
But far too many business partnerships end acrimoniously. This is particularly harmful when the partners are friends, relatives or in-laws. Below is some information about how to break up a business partnership that’s run its course.
Make all decisions with a cool head
People disagree all the time. If they’re involved in a family business, partners sometimes fall back on the roles they have always played in their family’s dynamic. When people know just how to trigger one another, it adds to the volatility of the relationship. Only agree to talk business after a cooling-off period when you’re both more rational.
Define your goals
Which is most important to you — saving your business or preserving your relationship with your business partner? Having incompatible goals will get you nowhere. This is a scenario you could find yourself in with a partner who is going through a messy divorce. Someone must look out for the business if a partner loses focus.
You must communicate
It is challenging to continue a dialogue with someone with whom you are very angry. If you can’t meet in person or talk on the phone, put your thoughts and ideas in an email. Just be very careful what you say and how it’s said. If communication has truly broken down, you might need to schedule a business mediation session or two to iron out your issues with one another.
Prevention is preferable to the cure
While hindsight is 20/20, you can learn from your mistakes. Going forward, always include an exit strategy in every business partnership agreement. It can be quite detailed and include various scenarios or broader in terms of breaking up the partnership. Having the right business contracts at the ready sets the stage for a clean break rather than protracted litigation.