Put it this way, if you’re asking that question, chances are you already know.
For me, 95 per cent of the time I know intuitively if I picked the wrong partner to work with. Sometimes it does take time though and sometimes the relationship has an expiry date.
You might choose a business partner and it might work well for a period of time and then it gets to the point where it no longer feels right or no longer is right.
I think ultimately when you get to a point where you know it’s not right anymore, then you’ve just got to work out your exit strategy. And that could be you either buying them out, or them buying you out, or in some cases I’ve even seen people divide the business down the middle and throw off their own entities in the same industry.
There’s this old saying, and I have to be careful saying this, ‘The only ships destined to sink every time is a partner-ship in business.
Look, I don’t agree with that 100 per cent but I do have a lot of experience in my own life to back it up as somewhat true. And I see it on a daily/ weekly basis with a lot of other people too.
But it’s not always true.
Often times we get into a partnership because we have a deficit or we have the requirement for someone to complement our skill set. We see this a lot in the tech industry.
Often a tech start-up company will have one founder who is a coder or technically based and then you’ll have another founder which is very sales and marketing based, and in those situations partnerships tend to work really well.
But if you are going to be in a partnership, and it may be too late at this point, you want to make sure you have a shareholders agreement. Now in the agreement make sure that in the event of a situation like this that there’s already a plan in place of what happens.
You can also have set prices for buy outs based on whatever valuation formula you use to ensure you don’t get screwed or take advantage of someone else.
But most importantly sit down and have an open and honest conversation with your business partner about what’s going on because whatever is going on might just be a symptom of a lack of communication or a misunderstanding. Because what we know about relationships of any nature is the number one reason they fall apart is when communication breaks down.
So my advice is to start by talking and go from there.