You know how to handle a romantic breakup -- eat or shop or run it off, give it time, try not to text your ex. But what do you do when your business relationship is ending? Better yet, how can you prepare in advance?
There is actually a lot you can do to ensure that you handle the dissolution of a business partnership with grace. It starts with the beginning of the relationship. Here are five pointers, inspired by advice to entrepreneurs from small business lawyers in YFS Magazine.
Business Breakup Tips
Write the end in the beginning: To ensure that the end is not a disaster, set out the plan for dissolution in your partnership or operating agreement, and lay out the details. It's not bad luck to think about a breakup when you start, just common sense. Even if your business is a success, change is inevitable.
Create a buy-sell agreement: Similar to the above, the buy-sell agreement should be in place before your business buys or sells anything. If you lay out a way that you and partners will handle the inevitable split, it will make it easy to follow that path or to prove a breach in a lawsuit. "The deal I make with my clients is -- I will stop reminding you to sign the buy-sell agreement if you promise that you'll let me handle the litigation when you sue your partner," says attorney Joel R. Nied. "I'll make a lot more money handling the litigation.
This is not a love story: This is a business arrangement, so even if you're in business with your family, try to keep cool when someone decides that it's time to move on. You may feel bad but don't let that get in the way of a smooth transition. Your customers and employees are counting on you.
Talk to a Lawyer
Whatever stage of the business relationship you are in now, speak to a lawyer. An attorney can help you conceive a plan and draft agreements that ensure you avoid lawsuits later. Get guidance.