Ditching a business partner

Dear Aunty,

Is it more difficult to part ways with a business partner or wife?

Thanks,
Split Soon

Dear Split Soon,

I read that one short line and bowed my head because your pain is palpable. My answer? It depends on you.

Let me explain. You raise a very important point that all entrepreneurs must understand. A business partnership is exactly like a marriage without the sex.

You start with all the buzz of a new relationship. It is exhilarating, fun, life changing and the sky is the limit and you are sharing this together. That emotional intimacy usually lasts six months, but instead of jumping into bed you meet in cafes while you hatch the plan. After six months, as the infatuation fades, you enter the next phase – a more rational phase – you eat in more, some disputes arise – nothing serious as you progress towards your goals – in this case not building a house but a business.

And then the big day arrives. You walk up the aisle, face each other, look into your partner's eyes and make your public vows. The business is launched, you tell your friends and family. What a day. As you clink champagne glasses you both swear you will do whatever it takes to make it work., through sickness and health, through good times and bad.

And thus you embark on your new life together, hand in hand, looking forward to your rosy future. So then what happens? Well, shit happens. The marketplace changes. You got the pricing wrong. Your key staff leave. You have to move the wrong appointments out the door. A competitor comes in and knocks you for six. The endless stress of cashflow troubles wears you down. The cracks appear. One works harder than the other. One wanders around indulging in grand new ideas while the other relentlessly does the hard work and watches resources. One wants to do a huge marketing campaign. The other wants a personal assistant. But hey, it is still early days and that sort of stuff is easily negotiated over lunch at your café.

But then larger cracks appear.

One wants to curtail growth. The other wants to launch big new expensive projects. One gets greedy and wants more salary, the other wants to sink every dime back into the business. One wants a sports car, the other wants new computers. One wants to hire their brother. The other wants to put in a professional CEO. One starts to invest time into a new business, the other is furious at their lack of attention on the current business...

And then it gets to the point where the differences can't be negotiated away over lunch and yes, divorce is mentioned for the first time.

And then the fights begin.

How gut wrenching. Who gets what? How do you divvy up the assets when one wants the money and the other wants the business?

What about the employees... and on it goes.

Of course, your shareholders agreement is helpful, but if you had your time again you would have spent a lot more time at the start of the business making it watertight... but then if you had your time again you would never have gone into business partnership together because it is now obvious that you were never meant for each other.

So to answer your question, parting company with your business partner can be just as painful... if you let it. However, to the best of your ability - and I know it is hard - you must take the emotion out of this. You must treat it pragmatically and with good will. You must bring every drop of emotional intelligence you possess to the table and no matter how you are provoked, you must stay rational.

If you can do this then you can have a good divorce and that is something you can be proud of.

So get to work,
Your Aunty B

This article first appeared on SmartCompany.com.au, Australia’s premier site for business advice, news, forums and blogs.

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