The numbers speak for themselves; the odds are not in a partnership’s favor. The partnership breakup rate can even be 20-30 percent higher than that of divorce rates.
As important as it is to create a partnership agreement, dedicating time to creating a dissolution strategy can be a lifesaver. This strategy will come in handy in the event of death, a life-changing injury, or personal differences.
It is important to know what you are to do, should that situation ever arise, instead of trying to make decisions in the heat of the moment when emotions are running high.
There are certain warning signs to look for that may indicate that your business partnership may be on the brink of failure:
When partners have different working styles, the unity they once felt to accomplish a common goal can easily diminish. When it comes to things such as whether to maintain strict schedules or work when the mood strikes, it is important to be on the same page as your partner.
If partners have very different working styles it can make tough situations even tougher.
As with any relationship, when responsibilities are not evenly distributed, it can create stress, and in many cases resentment. If one partner is taking on the brunt of operational management while the other is simply enjoying the perks of the business, this can cause a strain in the relationship.
Also, as in any relationship, communication is imperative to maintain a healthy balance. The most important thing is for a partner to speak up and work out issues.
When a partner feels as though they are unable to express themselves, the damage may be irreparable. As such, it is imperative to keep the lines of communication open.
It would be difficult for any relationship to work if all parties involved do not take the steps to effectively collaborate; compromise is key. When partners find that compromise has become very difficult to obtain, simple disagreements can lead to major operational issues.
Disagreements involving finances, customer service, and personnel can cause the partnership to further fracture.
If you recognize that a partnership is beginning to fail, it is extremely important to ensure that you end the relationship in a manner that will not prove detrimental to any parties or to the business, should it remain open.
If you and/or your partner reach the point of no return, these tips can help you to keep your split as professional as possible:
It is perfectly human to feel hurt, betrayed, or angry in the midst of a business breakup. While you have every right to feel as you feel, it is important to avoid communicating with anyone related to the business until the pure emotional reaction has blown over and you are capable of separating emotions from business decisions.
Evaluate the outcome that will make you happiest five or ten years from now. Keeping tax liabilities, personal finances, and professional goals in mind, it is important to consider how you may be impacted by a buyout or other solution. This must be done prior to considering any terms not already in your dissolution plan.
Certain situations in life are cause for seeking professional help. The dissolution of a partnership may just be one of them. The complexities associated with creating a partnership are as apparent when dissolving one.
By securing the right help, you will receive advice on things such as what to look for and when to finalize decisions.
It is necessary to protect your interests prior to acting on any exit strategy. This may require a revisit of the partnership agreement, as understanding is key. For help in making the right decisions for you, call the Pennsylvania employment attorneys at MacMain, Connell & Leinhauser at 484-318-7106 or contact us online today. With our office in West Chester, Pennsylvania, our attorneys serve clients throughout Chester County and Philadelphia.