It Is Time To Break Up With Your Business Partners?
Is it time for you and your business partner to break -up? No one ever really wants to end a relationship, especially not when it is connected to a money-making business. However, not all businesses succeed and not all business relationships last forever. The hardest part is knowing when it is time to end things and then doing so in a way that causes the least amount of harm (to yourself, the business, and to others).
Often prior to breaking up, a business will retain the services of a disinterested third party (such as a business attorney or business coach) as a last attempt to resolve the current issues. This is a valuable step and can often help to address both the issues that everyone is aware of and those issue that were secretly causing problems. Unfortunately, not all problems that come up can be cured; sometimes the only answer is to break up.
If you feel that it may be time for you and your business partner to break up, there are several questions that you can ask yourself to determine if it really is time to break up.
Communication is Key
Are you unable to communicate calmly with your business partner or partners? Does every conversation turn into an argument? Are you unable to talk about simple issues without someone storming off?
One of the first sign that a business relationship is starting to fall apart is that the parties can no longer just talk to each other. This failure or unwillingness to communicate can show up in a number of different ways, from business owners using third parties (e.g., employees, family members, etc.) to communicate, to only communicating in non-verbal ways (e.g., notes, emails, etc.), to refusing to directly communicate with each other at all.
Unfortunately, once the lines of communication have broken down, it is hard to getting them working again.
Unwillingness to Compromise
The majority of arguments can be resolved if both parties are willing to compromise a little. While there are some lines that cannot be crossed, most people are willing to stretch a little in order to meet in the middle. If neither you nor your business partner are willing to compromise or work towards resolving the issues that exist, it may be time to go your separate ways.
Uneven Workloads Equal Resentment
Is someone not pulling their weight? Is the compensation that is being received fair based on the responsibilities being handled? If the responsibilities of the business are not equally shared between the involved parties (or if compensation does not match the unequal distribution of work), resentment will begin to grow, usually on the side of the party who feels they are being taken advantage of or not being fairly compensated.
Often this issue can be addressed (without the business having to break up) by changing the responsibilities assigned to each party and then adjusting the compensation being paid so that it matches the work being performed. However, if the other owners are unwilling to agree to the adjustment, it may be time to break up.
Different Values or Business Styles
Do you and your partner have different business values? Are you disagreeing about how the business should operate?
While having a variety of diverse opinions is a wonderful thing in a number of circumstances, it does not always work well in business. The most successfully businesses are those in which all of the involved parties share the same vision of what the business is (or could be) and how it operates. When the owners of the business are no longer able to agree upon the most basic business principles, it is often time to consider breaking up.
We have all heard the phrase about too many cooks spoiling the soup. Similarly, there are countless ways to run a business and each business owner may have different ideas on how the business should operating (or how the soup should be seasoned). Unfortunately, sometimes these ideas are only shared after the business has been started, not before, and instead of the different ways blending together to make the business stronger, they end up making causing problems.
Sadly, one of the most common reasons that business partners break up is because one partner is acting irresponsibly or badly. The bad behavior of one owner can negatively affect the business and possibly the other owners as well.
This behavior can range from the business owner not taking their work seriously (simply wasting time or encouraging employees to waste time) to behaving inappropriately with customers (or employees) to actively stealing from the business.
Once an owner has crossed the line from being a benefit to the business to a risk for the business, or the other owners, it is time to terminate the business relationship.
Have your goals or the goals of the other business owners changed? Is everyone happy contributing the same way (or amount) as they did before?
Occasionally, whether due to life changes or simply the passage of time, people’s goals change and they may no longer want to be involved with the business (at all or as much as they were before). If an owner of a business no longer wants the same things out of the business as they did before or they are no longer willing to contribute in the same way as they did before, it may be time to either change the business relationship or end it.
On the flipside, sometimes people want to take a more active role in the business then did before or want to explore a new business opportunity that was not available before.
In these situations, solutions other than ending the relationship completely can be worked out; see the third article is this series for alternatives to breaking up.
While several items are important during the break-up, keeping the business alive and profitable is often the most important; the following article in this series will discuss how to break up with your business partner without destroying the business.
At the end of the day, only you can decide if it is time to break-up with your business partner or not. Due to the potential impact of business break-up, it is not a decision that should be made lightly or quickly. Should you have any questions about potentially ending a business relationship or alternatives to ending a business relationship, or would like to schedule a free initial consultation, please contact Navigant Law Group, LLC at (847) 253-8800 or contact us online.
Navigant Law Group, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Litigation, and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, and Guardianship.
This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.