Like many entrepreneurs, you may have launched a business with a partner. For an extended period of time, you and your partner may have worked well together and had an enjoyable and even profitable experience.
One reality you need to appreciate is that upwards to about 70 percent of business partnerships fail. There exist four key warning signs that your business partnership may need to come to an end.
Frequent Disagreements
There are always some disagreements between business partners. However, if you’ve reached a juncture at which disagreement are becoming more commonplace, and arguments are occurring with regularity, this is a sign that a partnership is in peril.
Ever increasing disagreements indicate that you and your partner no longer are seeing eye to eye when it comes to the business. This will negatively impact the way the business is running. In addition, it will have negative impact on your personally.
In the final analysis, when you are involved in a business partnership, this should be an endeavor that you enjoy. When the pleasure is gone from a business relationship, that can impact all other aspects of your life in a negative manner.
When you recognize that disagreements, arguments, and fighting become more frequent, you need to take a good, hard look at the situation. The only real way to resolve this type of situation very well may be bringing the partnership to an end.
Lack of Trust
Trust is vital when it comes to a business partnership. The stark reality is that a business partnership cannot long effectively function when the parties have diminishing trust in one another.
If you no longer trust your business partner, if your business partner no longer trusts you, or if neither of you trust the other, the partnership needs to be brought to an end. The idea of trying to restore trust is a nice thought. However, in most situations, restoring trust what it is lost in a business partnership is next to impossible.
Imbalance in Work
One development that happens time and time again in business partnerships is one party doing more of the work than the other. In an ideal world, business partners delegate tasks and responsibilities between them in an equitable manner.
Over time, an imbalance in the amount of work individual partners undertake can occur. If this becomes a chronic issue, that reality can eat at the functionality of a partnership.
When this disparity begins to occur, business partners certainly can take steps to try to rectify it. However, if making changes doesn’t work or even materialize, discussion needs to be had about ending the partnership.
As a side note, there are partnerships in which the parties initially agree that one partner will bear more responsibility for the operations of a business. Even when there is an initial agreement that one partner will do more of the work, overtime even an agreed disparity in duties can cause friction between partners.
Disagreement on Business’ Future
The fourth sign that the time has arrived that partners should cut ties is if they no longer agree on the business’ future. If differences about the future of a business continue to increase more dramatically, the operation of the venture itself will become jeopardized. In short, when this type of situation develops, ending the partnership may become the order of the day.
Three Most Common Steps to End Business Partnership
When a decision is made to end a partnership, there are three more common ways in which a partnership can be dissolved. First, you can elect to buy out the interest of your partner in the business. Second, your partner can elect to buy your out of the business. The partnership agreement is likely to contain directives on how a partner goes about buying out the other party to the agreement.
Finally, you and your partner can decide to bring the partnership and the business to an end. The partnership agreement likely has a clause about how shutting down the business is to occur. In basic terms, this involves liquidating the assets of the business, paying off all outstanding debts, and splitting whatever proceeds may be realized between the partners in the manner set for in the initial agreement between the parties.
Obtain Legal Advice and Assistance
Divorces can be challenging. The breakup of a business partnership can even more complicated and dramatic. Consequently, you best protect your rights and interests by retaining an experienced, skilled attorney.
The first step in retaining legal representation is scheduling an initial consultation with a lawyer. During an initial consultation, a lawyer will provide an evaluation of your situation. You will also be able to obtain answers to any questions you may have about your partnership dissolution. As a matter of general practice, an attorney doesn’t charge a fee for an initial consultation.
Jessica is a professional blogger who writes for Faxage, a leading company that provide Internet fax service services for individuals and businesses.