The Business Divorce

A business partnership is every bit like a marriage, and needs to be
 approached with the same thoughtfulness and consideration. When all is going 
well, everyone is happy and everything falls into place, but when problems 
arise, relationships can go down hill fast. Before you know it, the lines of
 communication dissolve, and people get nasty and behave in ways you never
 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 
choosing the right individual or company culture to begin with. In order to
 weather the ups and downs of long-term business cycles, the chemistry and 
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 
with a “whatever it takes to succeed” attitude.

• Spell out the balance of power. Make sure that responsibilities and
 boundaries for every area of the business are considered and addressed.
• Have clear guidelines how decisions will be made, when one or the 
other of you can make a judgment call on your own and when a decision
 requires both of you.

• Have a five year plan so that you know going in that you are both
 working for the same long term results. Make sure you agree on the direction
 you want the business to take.
EVERYTHING to do with finances needs to be addressed, discussed and
 legally ironed out, including future capital requirements and profit
• Address legal exit strategies for buying each other out if one or
 the other chooses to dissolve the relationship. Also consider the occurrence
 of catastrophic illness or death.
• Keep communication lines open and don’t allow resentment or 
frustration to build. Have a mechanism for regular and honest feedback.
• Take control of your ego early on and realize that compromise and
 success go hand in hand in business partnerships.

Building a business is never easy because there are so many stresses 
involved, especially when you are facing an economic downturn, employee 
issues or the endless battles between marketing and operations. Make it a
 point to avoid habits like discussing your frustration with other staff 
members. Pick your battles and learn to overlook the little things that
 don’t affect the true success of the business. Learn that “being right” has
 little to do with achieving success; sometimes it is better to be nice than 
it is to be right.

If the partnership just can’t survive, create an exit strategy that is a 
win-win for everyone. Resolve to keep your dignity and allow your partner to 
do the same. Take the high road at every turn. Do not allow attorneys or
 family members to persuade you to do otherwise. Avoid being vindictive and 
stay true to the terms of your original agreements. If possible, maintain 
some type of regular contact going forward. As time passes, you can feel 
good about the experience you had together.

Most importantly, make a promise to follow your mother’s advice. If you 
don’t have anything nice to say, don’t say anything at all. Chalk it all up 
to experience and learn what you can from it. More than likely, you will 
both move on to other business ventures, and in the end, you will find that
 the business world can be a very small place.

By April Fawcett Nagel

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