Running a business can be hard and sometimes take a toll on relationships – even the ones that got you there. If you find yourself in a position where you need to separate from a business partner, there are steps you can take to reduce the emotional and financial effects.
1. Plan for the worst
Business relationships can affect you personally and professionally. When going into business with someone, it’s a good idea to create a business partnership agreement that sets out the terms of your partnership – including what happens if things go wrong. This will help each partner understand what they’re responsible for, from time commitments to how profit or loss will be shared.
Add an exit clause and you’ll have a plan for what to do if a partner voluntarily or involuntarily leaves. You should consider seeking independent, professional legal advice.
2. Decide what you want to achieve
If you don’t have a business partner agreement, it’s still possible for a partner to exit the business on good terms. First, decide what you both would like to achieve. Include any financial and ownership considerations you have. This will help you come to an agreement and it may depend on the type of relationship you’re ending.
For example, if one business partner wants to exit immediately while another would prefer a transition period, knowing this upfront may help you to compromise. If you’re ending a relationship with a supplier, you may agree to give extra notice of your intention to leave.
3. Get a professional to help
It’s not uncommon for business partnerships to come to an end. It’s a stressful situation, but if you find it’s getting too complicated there are ways you can get help. Consult with a small business mediator or lawyer, if needed. They’ll be able to help you see things objectively and get the best result.
4. Communicate
Above all, keep communication honest and open, and keep records of it where possible. When you have a result, make sure to let your wider team know. The end of a partnership will mean a new beginning.
