Failed partnership

[Business News]

There are recurring theme posts where surprise surprise partners have fallen out with each other. Maybe there needs to be a sticky note placed somewhere to help prevent these unfortunate soles to see past the rose tinted glasses ahead of entering into a partnership rather than regretting the inevitable inequalities and tensions that are virtually guaranteed to arise from within a partnership?

It is human nature that one side always puts in more than the other(s) either financially or with time and effort. I too had experience of a lop sided partnership when my partner never met his commitments. I had, before entering the partnership, drawn up a contract that stipulated our accountant as an independent and binding arbitrator. Consequently, I could then extract myself painlessly from the failing partnership and took 100% control of the business.

The FIRST thing people should do when they embark into a business enterprise is have an exit route set up in writing that is binding on all parties. This will help arbitrate any issues and prevent, or at least limit, personal recriminations. Simply a must have for any private partnerships. Has anyone else had a contract that they have employed to exit a partnership or am I a lone realist?

[JGOffshore]

Sounds like good sense to me and I've seen more partnerships and companies fail when people fall out.

But I suppose it is a bit like getting married - not many of us plan an exit strategy for that partnership either!

Have a look at this post:
http://link4business.info/2008/10/starting-a-business-don%e2%80%99t-overlook-a-partnership/

[Zeno]

Couldn't agree with you more. People seem to chose their barber with more care than their business partners.

Also, just because your marriage works, does not mean that your business together will.

In my opinion, the absolute worst structure for a business is two couples. There should be a law against it.

[Stevej]

You are absolutely right

In many years of experience I have rarely seen a successful two man partnership. You can extend the definition of partnership in this case also to a Limited Company with two equal shareholders.

A pre-established exit route is vital. It is difficult to get people to see this when the seed of a business idea germinates and all they can see is the increasing sales line and cash balance on their projections. As soon as that rosy glow wears off things can rapidly become intolerable!