As with any relationship, starting a small business with someone can be an exciting new venture. However, the financial strain of daily operations combined with strong egos can easily turn a relationship sour. And although you’ve worked with someone for years, you may begin to realize that it’s time to part ways.
Here are five signs it’s time to break up with your business partner:
- You and your partner disagree on managing operations
- You and your partner differ on how to spend money
- You and your partner don’t communicate when problems arise
- You are putting more time and effort into the business than your partner
- You think you could run the business better
After identifying these signs, the next step is knowing how to break up the relationship without letting emotions interfere. Here are a few ways to get started:
- Begin the conversation: Although this part is the most challenging, it’s important that you sit down with your partner to explain your reasoning for ending ties. Remember to be clear and direct with your words to avoid miscommunication.
- Be Reasonable: The news that you want to break up the partnership may either come as a shock to the other person or be long overdue. Regardless, understand that feelings are vulnerable, so keep your emotions in check. Also, it’s good practice to admit your own faults, which may have contributed to the final decision.
- Make an Exit Plan in Writing: Present your proposal for parting ways and what will happen to the business and its operations. Whether you plan to buy your partner’s share of the business or return assets, you’ll need to put everything down in writing. If your partner agrees to the proposal or you both negotiate future arrangements, have an attorney who is experienced in business law review the exit plan and draft a contract for both parties to sign.
Of course, it’s not unusual for the initial conversation to get heated or for partners to disagree on the terms and conditions of the separation. This is where seeking professional business legal advice is beneficial. An attorney who specializes in small business legal services will help protect your assets, owner’s rights, and financial investments related to the business.
If you’re thinking of ending a business partnership or need professional business legal services, contact the Minnesota lawyers at KTF Law Firm. Our dedicated attorneys are experienced in business law and contract drafting and offer consultations, agreement drafting, and litigation services to protect you and the future of your business.