It is a wonderful Sunday or should I say, it should be a wonderful Sunday. I have about three hours before a meeting. I am just off Warren Street at a café only a block away from my former college halls. I love this neighborhood and have fond memories of this area. Even though I come here often, this place will never be the same without the friends at the halls. I am always in a contemplative mood before meetings. At college, I had always thought good times last forever, friendships last forever. The reality, as I have come to understand is that nothing lasts forever. I dedicate this blog to the friendship and relationship that has to come to an end because of various reasons.
In a perfect world, professional and personal partnerships would last forever. Sadly, we don’t live in a perfect world. Often, partnerships go through many hardships and conflicts for a variety of reasons and sometimes the only way out is splitting with the business partner.
How to avoid a split in a business partnership
When it comes to avoiding a split in a business partnership, a formal agreement can help a lot. An agreement can work like a roadmap to resolve conflicts and disagreements among the partners. However, it is important that the agreement is well thought through, reviewed by attorneys and provides guidance to the business.
In the absence of a good agreement, a business can lose direction very easily as each partner may start trying to run it on his own terms.
But, many a time, even a thoroughly written agreement cannot stop difference of opinions among partners.
How to handle that unavoidable split?
In case you find yourself unable to continue with a business partnership, you may need to split, avoiding unnecessary conflicts. Here are 5 ways you can handle a split professionally without causing further unrest among partners.
1. Resolve As Soon As Possible
Most business partnerships suffer through difference of opinions on various issues. If the issues are not identified and resolved at the beginning itself, they can lead to ego problems which are even harder to fight. So, in case of a conflict, you must try to see the bigger picture and resolve the issues before they become an ego tussle.
2. Find the Root Cause
If the root cause of the conflict is not clear, then try to find it. Many a time, a partner may act in certain way because he/she is not happy with the working of the company or feels that it is not making enough money or catering to enough clients etc. Such issues can be resolved by revision of the partnership agreement, equal commitment and a compromise from both sides.
Note: However, if you find a root cause that can’t be ignored or negotiated, like stealing, treachery, illegal activity, defiance to follow business rules etc., then there is no way other than ending the partnership.
3. Be Careful While Dissolving Shares
In case of dissolution of partnership, there are two options that are commonly used to split the business. First – where one partner buys the other’s share in the business, and the second – where both partners sell the entire business to third party.
If you decide to buy out your partner’s share, then make sure that you take the rest of the staff in your confidence. Ensure them that even though the business is going through a change, their lives won’t be affected by it. It is advisable to involve a lawyer in this matter to determine the amount you will have to pay to the quitting partner to buy his share.
4. Keep Business Reputation Intact
During the proceedings of splitting a business partnership, it is important to not get side tracked by personal conflicts with your partner. Otherwise, your business will suffer as two centers of power might arise in the same company. This will not only hurt the reputation of your company, but will also hurt the morale of your employees.
5. Collaborate To Make Business Decisions
If you and your business partner decide to sell the business to a third party, then you will have to find a good buyer for your business. In this situation, you must work with your partner and put your differences aside; this will help you get the best value for your business.
A business requires great passion and ambition from all partners but when it comes to resolving a conflict, it is better to keep your emotions aside and think professionally. Never forget that the splitting partner has also worked hard for the business. So, try to end the partnership on a positive note.