Many businesses are started by friends and/or family members working together. It can be exciting and fun to build a business with your partners, but sometimes disagreements arise that are not resolvable. If you feel that your business partner has become an active detriment to your company, or if your relationship simply isn’t working out, it may be time for a business divorce. While there are many different reasons to terminate a partnership, these are some of the most common issues that indicate a divorce might be in your best interests:
- Different Visions for the Business
The vision you promote for the future of your business helps shape the decisions your employees make on a daily basis, determining where your resources are focused and how your budget is spent. Conflicting visions are confusing for the employees on which your business relies, resulting in the business as a whole not being sure which way to go. If you see a lot of wheel-spinning without a lot of progress being made, that’s a red flag! While it’s okay to disagree on the small stuff, you and your partners should be in agreement about what you want to achieve and your overall plan for accomplishing these goals. Having conflicting or competing goals likely means you’re not going to achieve any of them.
- Conflicting Management Styles
If you and your partner both have completely different management styles, that may prove to be an insurmountable problem too. It’s very possible that your styles work perfectly fine on their own, but if you and your partner are managing your staff inconsistently, that also can lead to a breakdown within your business. While it’s okay to have different communication styles, it’s important to make sure that these differences don’t interfere with the structure of systems that dictate your company’s standard operating procedure. If you and your partner cannot agree on what that structure should look like, or are constantly changing it back and forth, it will be difficult for the business to sustain itself long-term.
- Business Failure
Even if you and your partner agree on a vision and are consistent in your management decisions, it could be time to cut things off and head in a new direction if the business isn’t thriving and you feel your partner’s poor decision-making is to blame. A compatible partner is still a liability if they are poor managers of money, careless when it comes to compliance with the regulations that govern your industry, or create conflict with other people who are key to the success of your business. Running a business means making an endless series of choices about what to do and how. If you can’t trust your partner to make good decisions, consider breaking things off before they bring you down with the ship.
Moving Forward
If you’re thinking about getting a divorce, it’s time to consult with an experienced business attorney who can advise you throughout the process. And for those of our readers who are just getting started or are thinking about going into business with someone, contact us today about putting together a partnership agreement! Agreeing upfront about how to split amicably will save you so much time and money whenever you decide to go your separate ways. IGC stands ready to guide you throughout the life cycle of your business, so give us a call at 925-399-1529 today!
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