The Business Divorce
A business partnership is every bit like a marriage, and needs to beâ¨ approached with the same thoughtfulness and consideration. When all is going â¨well, everyone is happy and everything falls into place, but when problems â¨arise, relationships can go down hill fast. Before you know it, the lines ofâ¨ communication dissolve, and people get nasty and behave in ways you neverâ¨ thought possible.
There are a number of factors that can cause business partnerships to fail, but more often than not, the reason is a lack of due diligence in â¨choosing the right individual or company culture to begin with. In order toâ¨ weather the ups and downs of long-term business cycles, the chemistry and â¨balance of the business partnership must be right.
Remember these key points when choosing a business partner:
• Have a similar work ethic. You both need to approach the business â¨with a “whatever it takes to succeed” attitude.â¨â¨
• Spell out the balance of power. Make sure that responsibilities andâ¨ boundaries for every area of the business are considered and addressed.
• Have clear guidelines how decisions will be made, when one or the â¨other of you can make a judgment call on your own and when a decisionâ¨ requires both of you.â¨â¨
• Have a five year plan so that you know going in that you are bothâ¨ working for the same long term results. Make sure you agree on the directionâ¨ you want the business to take.
• EVERYTHING to do with finances needs to be addressed, discussed andâ¨ legally ironed out, including future capital requirements and profitâ¨ distribution.
• Address legal exit strategies for buying each other out if one orâ¨ the other chooses to dissolve the relationship. Also consider the occurrenceâ¨ of catastrophic illness or death.
• Keep communication lines open and don’t allow resentment or â¨frustration to build. Have a mechanism for regular and honest feedback.
• Take control of your ego early on and realize that compromise andâ¨ success go hand in hand in business partnerships.â¨â¨â¨
Building a business is never easy because there are so many stresses â¨involved, especially when you are facing an economic downturn, employee â¨issues or the endless battles between marketing and operations. Make it aâ¨ point to avoid habits like discussing your frustration with other staff â¨members. Pick your battles and learn to overlook the little things thatâ¨ don’t affect the true success of the business. Learn that “being right” hasâ¨ little to do with achieving success; sometimes it is better to be nice than â¨it is to be right.
â¨â¨â¨If the partnership just can’t survive, create an exit strategy that is a â¨win-win for everyone. Resolve to keep your dignity and allow your partner to â¨do the same. Take the high road at every turn. Do not allow attorneys orâ¨ family members to persuade you to do otherwise. Avoid being vindictive and â¨stay true to the terms of your original agreements. If possible, maintain â¨some type of regular contact going forward. As time passes, you can feel â¨good about the experience you had together.â¨â¨â¨
Most importantly, make a promise to follow your mother’s advice. If you â¨don’t have anything nice to say, don’t say anything at all. Chalk it all up â¨to experience and learn what you can from it. More than likely, you will â¨both move on to other business ventures, and in the end, you will find thatâ¨ the business world can be a very small place.
By April Fawcett Nagel
May 6th, 2019
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