Sometimes it’s better to leave a business relationship than to try and salvage it even if that means losing friends and money, and experts point to some key signs that indicate a need to part ways. For example, if stalemates on decisions occur on a frequent basis or if you hide things from one another to keep the peace, it may be time to part. The same goes if one of the partners isn’t willing to do a fair share of the work. And, perhaps most of all, if it comes to pass that partners no longer share the same vision or goals for the company, it may be a good time to cut losses and move on. For more on this continue reading the following article from TheStreet.
Much like a marriage, a business partnership may start out with the best of intentions, but constant disagreements or financial woes can bring even the strongest relationship to its knees. Sometimes it’s best to cut your losses and part ways, even if it hurts your feelings — or your livelihood. Our experts weigh in on the top five ways to tell it’s time to stop working things out and start packing boxes.
1. A stalemate occurs on a regular basis.
"If no decisions can ever be made because you and your partner can’t agree on anything, then what are you left with?" asks Angie Segal, business coach and owner of ActionCoach in Silver Spring, Md.
When no decisions get made, a business won’t have any new revenue streams and turns quickly stagnant, Segal says.
"You end up stuck in endless loop of ‘Oh, we need to make a change, but we can’t agree, so let’s do nothing,’" she says.
In a good partnership, both parties should understand what happens if a stalemate occurs. Either an outside party has a vote, or one partner’s decision trumps another. When this doesn’t happen, it’s time to think about moving on.
"When neither party is willing to budge, there’s nothing to do but walk away," she says. "Somebody has to be willing to compromise or take a chance."
2. You’re hiding things from one another or not communicating
In many partnerships there is a "natural division of labor," Segal says — one partner may be better at sales, while one person is better at the books. Unfortunately, this may lead to a situation where neither partner understands the other’s role and the waters get muddied.
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"If your partner is not willing to sit down with you and go over the books, then you have a serious problem," she says. "If your partner keeps telling you lots of sales are ‘in the pipeline’ but you never see anything, then you have issues."
When partners start using intermediaries to communicate or communicating exclusively by text or email — even when they’re in the same office space — it’s a major red flag that the lines of communication have broken down, says Charley Polachi, executive recruiter and co-founder and managing partner at Polachi Access Executive Search in Boston.
"Most businesses didn’t start over text — they were probably hashed out in a bar or over a meal, and you’ve got to keep that up," Polachi says. "You don’t have to be best buds forever, but you do need to get off campus once in a while and have a planning session."
If you don’t want to get face to face with your partner long enough for a weekly meeting, it’s a definite sign that things aren’t going to work, he says.
3. The employees are running the show by pitting one partner against the other.
When company employees have begun running the show, using the partners to get their own way, it’s time to throw in the towel. It means neither partner is truly connected to the business anymore, Segal says.
"If an employee wants a day off and gets a ‘no’ from one partner, then they’ll go to another partner and that partner will grant it because the two aren’t in sync," she says. "Then the entire business takes a hit because there aren’t enough people working."
When employees know they’ll get different responses from the people who are supposed to be running the company, it’s a clear sign that the lines of communication have broken down completely, or at the very least that one of the partners isn’t truly devoted to the success of the business.
"Overall, it’s a sign that one or both partners are checked out, or perhaps that one partner feels like they can make any decision they want without consulting the other," Segal says.
4. Your partner isn’t pulling his or her own weight.
"Probably one of the biggest red flags is when you seem to be working 80 hours a week, and for the life of you, you can’t figure out what your partner does all day," Segal says.
Any situation where one partner bears the brunt of the workload regularly or commits more time to the business, there will more than likely be resentment and bitterness over the inequality in involvement, says Jennifer Friedman, chief marketing officer of small-business solutions at CT Corp. and its subsidiary BizFilings.
"From a business perspective, unresolved issues between business partners creates friction, wastes time and impedes progress," Friedman says.
In many cases, one partner may find the other continues to fail at delivering promised results, he or she may always make excuses, and at some point the business is bound to suffer, Polachi explains. "It won’t be just one event," he says. "It will be a series of things over some period of time and then one partner will hit their breaking point and that’s the end of it," he says.
5. Your values or vision no longer align.
"Having the same vision for a business is crucial to the success of any partnership," says Susan Inouye, executive coach and author of Sawubona Leadership: The Bridge to Engaging a New Generation of Leaders. "When visions diverge, it is time for change."
Opposites attract not just in relationships but in business as well, Inouye says — and that can be good and bad.
"People get into business because each brings to the table a talent that is different and can complement the other," she says. "But what is often overlooked is alignment of values. When something as innate as our values are out of sync, then it’s time to go their separate ways."
If you and your co-founder don’t see eye to eye on financial obligations – spending, investing, funding, and so on – this is where you see a "fundamental partnership disconnect," Friedman says.
"If you and your business partner consistently struggle to come to a mutual decision and handle disagreements respectfully, your relationship may not be destined to last," she says.
This article was republished with permission from TheStreet.