Critical steps to take when business partners go separate ways

Frustration has mounted. Your business partner and you no longer jibe on many things that once made your alliance a strong and nearly unstoppable one. Your start-up business showed promise from the start, but, after a few years and some minor disagreements, the company has grown stagnant and even faltered a bit.

Your partner has not been carrying his weight for the past couple of years, and it shows. Your partnership is no longer working. It has eroded to the point that trust is no longer present and irritation has risen. Your visions and commitment no longer are the same. It has time to part ways.

Talk, review contracts, meet with attorney

Business partners break up for many reasons. Perhaps they have grown apart, no longer share the same goals or even questions each other’s ethics and behavior. Splitting up a partnership is not an easy task. In a way, it has similar correlations with divorce.

However, you can make matters easier by considering the following steps:

  • Discuss the situation and your intentions. Communication remains critical. When you started the company, the two of you frequently met for planning. Now, you must do the same in planning a business separation.
  • If things are not working, make sure of a swift dissolution of the partnership. Procrastination will not solve matters. It likely only leads to more worries.
  • Make sure to scrutinize your partnership agreement. This includes extra attention on leases, contracts and loans. You do not want the responsibility for certain matters falling exclusively on your shoulders.
  • Inform any person or company that has worked with your business or for whom you provided services. This list includes customers along with vendors/suppliers and employees.
  • If realistic, consider buying out your partner. You may have to scramble for financing, but this option could work. If you pursue a buy-out, make sure to consider having a non-compete agreement in place.
  • Meet with the team of professionals that helped your business from its inception. Seek advice from attorneys and accountants.

Consider this a new direction. An amicable business break-up is what you hope for. It is time to move on and pursue a different path for your business or your next business venture.