With economic stagnation and the resultant unemployment on the rise, this is the age of entrepreneurship where more and more people are getting interested in building their businesses.
We know that the initial years of any business venture are the hardest because effort and cost heavily outweigh output, and not many startups survive this turbulence. Moreover, this is the time when multiple-partner enterprises are most prone to break-up.
These break-ups do not hurt a lot if they happen during the early years of a business venture. But in successful business ventures, these break-ups do not only financially damage the business but can also cause a PR nightmare if not handled properly.
Therefore, we have compiled different factors for you that should be considered by all the involved parties to break up the business ideally.
- Respect the Contract:
Almost all successful businessmen have the foresight to structure their business around a contract that has provisions for severance and dissent. Although such agreements do not cover every possible situation, they provide a reasonable starting point to kick start the negotiation process.
- Be Kind and Empathetic:
Even though you or one of your partners have decided to part ways, but still do not forget about the fact that you all have worked night and day to establish this business, and have faced every hardship together.
Appreciate the time you spent with all of them, be kind to their needs and respect the time and effort each one of them has invested in making your venture successful. If you are frustrated by the whole break up, take your time, and communicate only after collecting yourself properly.
- Address the individual and common priorities:
This step is crucial for the painless separation, and it is required to be dealt with high sensitivity. Pinpoint your preferences as well as the priorities of all the involved parties like prevailing financial situation, tax liabilities, etc.
There is every chance that there are going to be some mutual areas of interest, and a considerable amount of flexibility is required here. However, the bottom line should be that the deal must be fair. It is an excellent option to offer the exiting party a buyout or a payoff with a small stake in the business so that your partner does not feel disincentivized for leaving the company.
- Establish a deadline:
Although breaking up with a business partner takes an emotional toll and creates a problematic situation, but do not linger on with this situation. Set a deadline for the break-up and make sure that the matter is taken care of by the established date.
- Look for Legal Counsel:
During the negotiations, it is always useful to involve someone neutral, and a local legal separation attorney fits into this space perfectly. During the business break-up, you can easily get carried away with emotion and overlook certain things.
But a legal counsel would be a sane voice who will look over the contract objectively and evaluate fairly to chalk out a balanced deal for all the parties involved.
We know that break-ups take a toll on us, whether they are romantic or business in nature. But amid all this turbulence, we must make sure that we separate emotion from reason and analyze the situation objectively so that we can move on with our lives.