A business partnership can be a valuable arrangement. Partners can share financial risks, legal liabilities and input. The upside of this is that both partners reap the rewards of making the business profitable.
Nonetheless, like most things, business partnerships tend to have a shelf life. Interests and priorities can change and there may come a point where your partnership is a detriment rather than a benefit.
How do you know if your business partnership has run its course?
When the workrate is waning
Many business partnerships operate on the basis of splitting profits 50-50. This typically means partners expect a 50-50 share of the workload. That doesn’t mean that partners carry out exactly the same roles, but the effort in their particular duties needs to be there.
When a partner becomes disgruntled, their workrate usually wanes. For example, a partner may no longer be putting the same effort into customer service or obtaining new clients. A partner not pulling their weight is one of the most common causes of disputes in business partnerships.
When communication has broken down
To get things done, partners need to communicate effectively. They should be on the same page in terms of growing or sustaining the business. Should disputes arise, these should be resolved quickly via effective communication.
When communication breaks down between business partners, this can not only lead to disputes but deadlock situations. When both partners have a strong say in terms of the decisions of the business, this can mean staying stagnant for a long time.
Eventually, most business partnerships come to an end. That doesn’t mean they have to end in a negative manner. Exit strategies can be implemented in the partnership agreement and communications can remain amicable. Seeking legal guidance is the best way to ensure a smooth partnership dissolution.