How to Survive a Bad Biz Breakup
Severing a business partnership can feel a lot like a nasty divorce.
A startup CEO learned the hard way that severing a business partnership can feel a lot like a nasty divorce. Find out how he rebounded from the experience.By Kent Healy, Healo Capital co-founder and chief operating officerThe Challenge: The early stages were gratifying and exciting. As a team, we appeared to work well together, accomplishing nearly every company goal. But the passing of time (roughly six months) shed light on differing opinions and values. Our partner clearly wanted different things. The team dynamic and morale suffered, as did the company’s productivity. By this time, new members of our team were also involved, only adding to the tension.The Solution: We first approached the situation through several congenial conversations. Although all parties conducted themselves with maturity, a troubled partnership is extremely complex, frustrating and taxing. I finally understood the correlation of business partnerships and marriage.After discussing multiple options, we sought legal counsel to initiate the inevitable split. I also consulted several books. I was careful to separate the details and emotions of this transaction from daily business activities and other team members. I also began preparing for the next steps by learning more about the business processes I was not previously involved in.The Aftermath: Initially, there was uncertainty, but the long-term damage was minimal. Following the split, we acknowledged the issue during a meeting and allowed a time for questions to address any personal concerns, anxieties, etc.Not long thereafter, a new sense of confidence was restored both personally and as a team/company. We had let go of a key team member, but instead of replacing him immediately, we focused on other strengths within the company, ultimately shifting our business model and creating more fulfilling work.The Lessons: 1. Think carefully before entering any kind of partnership — they are often more difficult than a marriage because there are no “unconditional” sentiments. And, of course, the involvement of emotionally charged issues, such as assets and money, only serves as fuel to any existing fires.2. Perform quality pre-screening on both potential partners and employees, but realize you cannot identify every possible outcome.3. Building on the previous point, establish clear company policies that allow the “company” to address partner/employee issues immediately and as “objectively” as possible.4. If a legitimate partner issue arises, address it immediately and with utmost respect. Many problems can be worked out with communication, but for those that cannot, revisit the first three steps.After working with the media from his teen years, Kent Healy has become a go-to source for creative insights on entrepreneurship, leadership, life-skills education and productivity. These days he travels frequently and works remotely while operating his businesses in publishing and real estate. He is a location-independent entrepreneur, speaker, real estate investor and author of six books.The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the country's most promising young entrepreneurs. The YEC promotes entrepreneurship as a solution to youth unemployment and underemployment and provides its members with access to tools, mentorship and resources that support each stage of a business's development and growth.
