Running a business can be hard and sometimes take a toll on relationships – even the ones that got you there. If you find yourself in a position where you need to separate from a business partner, there are steps you can take to reduce the emotional and financial effects.

1. Plan for the worst

Business relationships can affect you personally and professionally. When going into business with someone, it’s a good idea to create a business partnership agreement that sets out the terms of your partnership – including what happens if things go wrong. This will help each partner understand what they’re responsible for, from time commitments to how profit or loss will be shared.

Add an exit clause and you’ll have a plan for what to do if a partner voluntarily or involuntarily leaves. You should consider seeking independent, professional legal advice.

2. Decide what you want to achieve

If you don’t have a business partner agreement, it’s still possible for a partner to exit the business on good terms. First, decide what you both would like to achieve. Include any financial and ownership considerations you have. This will help you come to an agreement and it may depend on the type of relationship you’re ending.

For example, if one business partner wants to exit immediately while another would prefer a transition period, knowing this upfront may help you to compromise. If you’re ending a relationship with a supplier, you may agree to give extra notice of your intention to leave.

3. Get a professional to help

It’s not uncommon for business partnerships to come to an end. It’s a stressful situation, but if you find it’s getting too complicated there are ways you can get help. Consult with a small business mediator or lawyer, if needed. They’ll be able to help you see things objectively and get the best result.

4. Communicate

Above all, keep communication honest and open, and keep records of it where possible. When you have a result, make sure to let your wider team know. The end of a partnership will mean a new beginning. 

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this, consider the appropriateness to your circumstances.