Life Cycle Of A Business Partnership
Richard and Jeri have been where you are, owners of businesses, having partners and dealing with all the issues having partners brings. This real-life personal experience plus our professional expertise have prepared us to help you go through the steps that make up the beginning, the middle and the end of the life cycle of your partnership.
Each stage has its thrills, challenges and perils. Part of our job as advisers is to educate you on how to be prepared to avoid problems, mitigate risks and maximize opportunities. We care. We want to see you succeed. We encourage you to start with the end in mind so you are aware of what’s possible. We want you to have hope and courage that, if you find yourself in a bad situation, we can help you extricate yourself and move on. We want you to be confident that we can help you build a solid foundation upon which to build the business of your dreams.
Here’s what you’ll want to know at each stage of the life cycle of your business partnership.
Forming A Partnership
Sure, it’s fun to say to your friend, family member or science project partner, let’s start a business with this drawing we created on the back of a napkin. Partners can provide many resources that one partner can’t provide individually. But be realistic. A lot rides on the decision to partner. You’ll want to go through the process detailed on the flowchart above and ask these questions:
- How do I know if that person who I’m considering as a business partner is right for me in the long term?
- Is partnering (and giving up equity) really the right choice, and what are the other alternatives (maybe you want to ‘date’ before the ‘wedding’)?
- What goes into a business partnership agreement? What should I know before I talk to my lawyer so I can reduce my costs?
- What if we bring different amounts of money, time, contacts, expertise, etc. into the business?
- How can I protect myself so that if I ever have a business breakup, I will still come out a winner?
- How can I make sure my family is protected in case something happens to me?
Growing A Partnership
The more you work together, the more communication becomes important. As you add employees, expanded numbers of clients and customers, more complicated processes, new products and services, there are many more chances for miscommunication. Perhaps more drama, more conflict. The business partners model the dynamics of the culture they’re creating. Communication is the key, and that’s based on conversations. Conversational Intelligence tools maintain a high level of communication, and we highly recommend using them.
We also recommend an Annual Partnership Review. Life happens and things change. Partners’ interests shift, as do family demands, health priorities and a million other things. An Annual Partnership Review keeps the partnership relevant, which keeps the business growing.
You’ll want to go through the process detailed on the flowchart above and ask these questions:
- What are the brain-based communication tools from Conversational Intelligence and how can they add value to my business and partnership?
- Why has Conversational Intelligence been identified as one of the five fastest growing business trends by Inc. magazine?
- Can communication training and coaching really improve customer loyalty, staff productivity, innovation, morale and overall profitability?
- How can I prevent small issues from escalating into major problems?
- How can I keep my partnership healthy and adaptable to current situations using an Annual Partnership Review?
- What questions do the partners ask each other at the Annual Partnership Review?
- If I started my partnership without a partnership agreement, why should I invest in one now?
- If I get one now, can it still protect me, my business, and my family? Can it still prevent a lot of future heartache, expense and stress?
- If my partner(s) and I have changed our working arrangements, but haven’t changed any of our partnership agreement, what impact could that have on me?
- Is it worth the time and expense to document those changes?
Breaking Up The Partnership
At the end of business life, if it all goes well, the partners look to exit the business using a succession plan, take the cash and each start a new chapter in their lives (see Option A above). That’s what they hoped for in the beginning.
Perhaps their communication skills have allowed them to understand each other’s needs, and they decide to split up amicably (Option B). They have five basic choices to end their partnership with a number of potential variations on each choice. Their communication skills again give them the benefit of arriving at a mutually beneficial choice with little stress or expense.
Perhaps you’ve had a partnership for a while, and it hasn’t been going well lately. You have different ideas about where the business should be going, your partner is taking money out of the business without your agreement. Or maybe your partner has lost interest and isn’t putting in the effort. Maybe you don’t even talk to each other anymore. In a worst-case scenario, maybe your partner is abusing you, oppressing you, or engaging in fraudulent or illegal activity (Option C).
It can be very costly and disruptive to break up a partnership. Perhaps you can invest in Conversational Intelligence training and coaching to arrive at an amicable breakup if you and your partners are willing to try. It will reduce your costs, time and stress.
Alternatively, we’ve had clients who felt they were in impossible situations and couldn’t see how it could be resolved. And no one else could help. Yet we did. We know how to protect your rights and bring about a favorable resolution to your situation. Our legal team uses creative strategies to break up businesses and settle seemingly intractable disputes in or out of court.
You’ll want to go through the options and process detailed on the flowchart above and ask these questions:
- Should I end my partnership? What are the risks and rewards? What do I have to consider when making this decision?
- What are the five ways to end a partnership and which one will be the best alternative in my situation?
- What are some other case studies that are similar to mine?
- I’m a minority shareholder. What are my rights?
- Is there any hope that I can find a way out of this seemingly impossible situation?
- How can litigation be a tool for empowerment, rather than something to be feared?
- What’s involved in litigation if I decide to go that route?
- How long will all this take?
- What other professionals might have to be involved? Can you recommend them?
- What impact will a business breakup have on my business (or former business) and all its employees, vendors, clients and other stakeholders?
- How do I pick up the pieces afterwards?
Download our e-book to get many of these answers and to read some actual case scenarios.
At Dunn Lambert, LLC, we answer your questions, listen to your needs and empathize with what you’re going through. Then we move into action to find a solution. We stick with you, negotiate on your behalf in or out of court, and come to the best possible resolution. Learn more about our services. Call us today at 551-228-2690 to get started.