(This is part 6 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)
Partners & Parties. Partners and parties are much alike in the world of business. A lot of times when you first got into business you needed a partner or a group of partners to get things started. This is very normal and a very prudent thing to do, because you get to syndicate the risk and it helps to excel the business with more talent and more money to help the business in its most crucial stages of the startup phase. At a party, there comes a time when the guests need to leave. The same is true in businesses with partners. At some point, a partner who helped bring you to the party needs to pick up their hat and coat, and leave the party. This is when things can get very interesting.
All too often when partners start a business they are friends or acquaintances (in the worst situations they are relatives) and things are great and everyone is having a love fest. But then, over time the reality sets in that this is a real business and everyone has to contribute something to the business. Just like everyone is supposed to contribute something to the party. Of course not all of the partners are going to see the same things or have the same views on all of the aspects of the business. This is normal, because we are all wired differently and we all have different agendas. But what happens when it is time to break up the party?
If there is not a buy-sell agreement in place (which would address this exact situation) and generally there isn’t such an agreement in place, then the party could get ugly. And it could very easily be the demise of the business if it is not addressed properly and quickly.
Don’t be the one who gets left out of the party or worse yet gets asked to leave the party empty handed and emotionally drained. Be proactive and accept the fact that the party was fun, you learned a lot and either take your toys and go home or be willing to give the partners some of the toys and send them on their way home. But be prepared, because eventually the party will be over.