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Wednesday, May 21, 2008

Divorcing your business partner

In my Miami Herald column today, I wrote about business break ups. The idea came to me when I watched the emotional turmoil one of my close friends went through. My friend felt she was doing most of the work to keep the clothing store afloat, yet her partner was sharing equally in the profits. Her partner happened to be a close friend. Working moms, she assumed they would split the duties and both have work/life balance.

I have never had a business partner, but I've thought about it. And like most people, I likely would go into business with a friend. Until now, I had never thought through what would happen when and if things go bad. My friend and her partner had been gal pals when they started the business together. They had kids the same ages. Their husbands were buddies. So, the break up took a huge emotional toll on both families. They no longer speak to each other.

Attorney Greg Ward of WardKim had some of the best advice on the topic. He says always have a well thought out partnership agreement when you start the business. If it's too late and you find yourself in the middle of a dispute, try HARD to keep communication open. When partners stop talking, that's usually the beginning of the end.

I found an interesting article on the American Bar Association site that says, "Curiously, many business divorces occur once the business has become successful, the principals are taking home real money and there is significant equity in the business. With success come the difficult, acrimonious issues and decisions that the partners failed to face early on or dealt with only partially.'' Who knew?

Have you endured an emotionally wrenching business divorce? Has it affected your personal life? What would you do differently the next time around?

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