A business partnership benefits you and your partner. The two of you bring your own experience, resources and expertise to the company that you start or purchase.
You have someone else that you can rely on to remain as dedicated as you are to the company, which can help when you need to focus on other matters, like your family. The two of you can also help keep each other motivated and dedicated to the business you’ve built together.
Still, like most human relationships, business partnerships often don’t last a lifetime. They may not even last for the entire life of your business. How do you identify the warning signs that you need to consider ending your partnership?
Something destroyed the trust between the two of you
Like a spouse, your business partner has a strong impact on your financial circumstances. You need to be able to trust that they will behave. When your business partner steals from the company or lies to you, you may no longer be able to trust them with access to your resources and control over major business decisions.
One of you is ready to retire or move on to a new business
Maybe after two decades of working together, one of you is ready to retire and enjoy their golden years. It’s also possible that headhunters from a bigger company or a start-up have made one of you an offer that is very hard to refuse.
If there are personal or financial reasons for one of you to end your involvement in the company, it may be time to dissolve the partnership or have the partner who wants to stay buy the other one out of the business.
You no longer agree on the big picture for the company
The less you negotiate and outline in your initial business partnership contract, the more uncertainty there may be for the future of your relationship. For example, when the revenue reaches a certain level, one of you may want to sell the company while the other doesn’t.
On the other hand, one of you may want to push to become a publicly-listed company with traded stocks while the other wants to keep things small and partner-owned. When your visions for the business start to diverge, you may have no choice but to resolve the matter by parting ways.
Recognizing the signs that your partnership is no longer as beneficial as it once was can be the first step toward a better business relationship in the future.