Q & A Table of Contents
First He Was My Friend, Now He’s My Business Partner — And It’s Not Working
From: Jeff, Marlton, New Jersey
Question: My partner and I started a corporation only six months ago and already it is clear that we will not be able to go on as partners. We have extremely different work ethics and values. We have been friends for years before this and we had big plans. However, I don't believe that I will be able to continue working with him. We borrowed some money from my parents and a smaller loan from the bank. I want to continue with the company, basically I just want him out. What should I do?
Response: Developing business relationships with friends is extraordinarily risky, whereas becoming friendly with folks you get to know at work is probably less likely to cause difficulties. The challenge with friends is changing the nature of the relationship.
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You and your partner need to communicate clearly with each other. In order to do this you need to do a good deal of homework ahead of time. Figure out who are stakeholders in the situation and what their interests are. For example, your parents would probably like to get back the money they lent you. You need to assess whether you want to end the business partnership itself — and what you’re prepared to accept as a consequence of that in terms of your personal friendship.
What do you think your partner feels, what does he have at stake in the business relationship — and the friendship? Make a whole range of assumptions about what’s important to him and to other stakeholders — and why those things are important.
Once you’ve made those assumptions, the next step is to take a reality check on the accuracy of those assumptions. Ask questions that allow for open-ended (not yes/no) answers so that you can learn from your partner and the other interested parties with whom you talk what is likely to convince them to reach agreement with you. Perhaps your partner would be thrilled to be bought out — and if you have the money and are convinced the business can afford the investment, this may offer the chance of a clean break.
Listen for what is likely to trigger your partner’s enthusiasm for splitting up. Find out how committed he is to the business. Can the business itself be split into two different organizations? And would each partner be happy going into a different aspect of the business?
Negotiation is about trading information — even when it is ‘only’ information about the commodity about which the parties are bargaining. To trade information you need to know what you know and what you need to know. Preparing makes that possible and asking questions, particularly of your partner, should give you ideas of how to move towards your objectives.
Good luck,
Steve
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