Partnerships

So should you save or cease your business partnership? Is it worth it to try and find a facilitator to work through the years of baggage you hold against each other or just hire a lawyer and elect to use the shotgun clause to buy him or her out?

If you look back at what you’ve achieved together, you may think twice about dumping such an important resource for the firm. But at the same time, sometimes two business partners outgrow each other, or can’t make the magic together anymore. It may be time to split up.

But you won’t gain insight into which direction to take from a lawyer. You will start the process of ending the partnership and negotiating the payout. Then one of you will have to figure out how to grow the business again and recover from that big loss of cash you just paid out.

There are two questions business partners need answers to before deciding it’s time for an expensive divorce.

1. What problem would be solved if either of you left?  
2. What problem are you really trying to solve that isn’t being addressed?

Here are the top five reasons that partners want to divorce. We’ve managed to come to terms with all these issues for our clients to their satisfaction. These are the underlying reasons that don’t get discussed but really need air time so you plan the next steps in a way that rewards everyone (instead of penalizing some), including the company.

• Square peg, round hole syndrome - The company needs a role fulfilled. One partner has the expertise and not the passion, or the passion and not the expertise.
• Unfulfilled Expectations - What you started out agreeing to build has not come to pass. You believe it’s because the other partner didn’t fulfill promises or pull their weight.
• The 49/51 Problem: You both thought that the 51% partner should lead the business. But the business needs a leader with more experience.
• Family & Merit - In the beginning you needed employees so family members jumped on board. When poor performance happened, each partner thought it was the other’s responsibility to fix it with their relative. Non-family employees are evaluated on merit, family are not. Now, no one is taking responsibility for anything.
• I want out - One partner is unhappy and wants to be bought out this year. They’ve left the business and now you’re shouldering the burden of running it but still paying the absent partner dividends.

Learn about how to manage your partnership problems by reading these articles: