Every business partnership has ups and downs. Usually, the lowlands and peaks balance each other out. When the valleys become the status quo, however, it may be time for ending a business partnership.
The good news for partners in this predicament is that there are always other entrepreneurial fish in the sea; you can even use a dating app to find them. In the meantime, though, you have to smoothly and maturely end your relationship with your current partner.
Can ending a business partnership be easy?
Sounds daunting, right? Truthfully, it can be. Sometimes, you’re not even certain whether the partnership has merely hit a few stressful rapids or is heading straight over a rushing waterfall. But a few telltale signs can help you determine when it’s probably a smart idea to start exit planning.
One surefire indicator is slowed-down company performance overall. This is often linked to poor partner communication or lopsided responsibilities that push one person beyond his or her capacity. Don’t ignore this red flag: A business that’s not hitting financial goals quarter after quarter could bottom out quickly without a major intervention.
Another symptom of a partnership that’s run its course is a founding member who’s ducked out, at least mentally. Unless a gradual exit was the expectation from the beginning, as is sometimes the case, it can only serve to produce heartache and negativity if it’s allowed to continue.
No matter how bad your business relationship has become, you can try to end it on good terms. Give yourselves the chance to function well separately, and maybe you’ll remain important members of each other’s networks. Just apply a few tactics aimed at reducing friction when saying goodbye.
1. Salvage your partner’s expertise.
You and your partner linked up to leverage your strengths and unique background experiences. Because you’ll be going it alone or with a different partner in the future, you must identify the skill sets that will walk out your door. When you identify your respective knowledge gaps, you can hopefully engage in a knowledge transfer that leaves you with the information you need and leaves both partners feeling a long-term benefit from the truncated partnership.
Christine Alemany, CEO at branding and marketing firm TBGA, recommends documenting this transfer of ideas, not just talking about it. “Don’t part ways without a transition plan,” she advises. “List out the unique pieces of expertise the partner brings to the table, and form an internal plan for who will take over those responsibilities.” Be aware that you might have to learn something new or bring others on board during the transition to reduce the risk of losing legacy data and proficiencies.
2. Don’t prolong the separation.
When it’s time for a divorce from your business partner, keep the break clean. Come to terms with the reality after you both agree that reclaiming the relationship just doesn’t make sense. The messier and murkier you let the process get, the more bitterness you’ll churn. Set a date to transition out of the partnership, and keep the business out of your relationship after that deadline.
Ironically, if you can get past the difficulty of moving on, you may be able to remain friends. One caveat to becoming stoic about the breakup: Don’t resort to ghosting behavior. Focus on empathetic, professional conversation. The more you communicate during the dissolution of the partnership, the less confusion will occur. Your employees and clients will appreciate how you’ve handled the process, and you’ll feel less resentment.
3. Keep it all business.
Deciding to renounce a romantic involvement is incredibly personal, but breaking up with a business partner doesn’t have to be. In many cases, it’s just a natural outcome of two individuals whose professional goals no longer mesh. Unfortunately, many entrepreneurs take breakups hard; a partnership termination bursts the ego bubble, even in the most civil of scenarios.
Starting to feel the pain of bruised pride? Remind yourself of this advice from Larry Donahue, an intellectual property attorney at Business Law Southwest: “It’s always wise to swallow your pride and try to negotiate an amicable resolution in order to minimize the cost to your wallet and your reputation.” Seek distance when you start to get angry or emotional. You might want to engage a mental health professional to help with any unresolved feelings, just as you’d utilize professional counsel for any legal issues.
Change allows for growth, but it always involves personal challenges. In the case of moving past your business partnership, remind yourself that it’s for the good of the organization. After all, every broken business partnership opens the door to new possibilities.