Business partnerships, like most human relationships, don’t last forever. Eventually, even the strongest business relationship will need to change or end.
When you want to take the business in another direction or sell it, you may need to consider buying out your partner to achieve that goal. There are three steps that can help you end your partnership gracefully and with minimal complications.
Review your partnership agreement
The contracts and business documents created in the early days of your company will likely reflect your partner’s expectations in a buyout scenario. Checking your agreement for terms about how you split the company or approach the buyout will help inform the right steps to take.
Place a value on your business and your individual contributions
An accurate business valuation is a crucial part of any business sale or buyout transaction. Looking at your revenue, liabilities and possible future what the company is currently worth. Once you understand that, you can try to put a price on the individual contributions you and your business partner have made. Those financial details will be important in the next step.
Make a considerate and open-ended offer to your partner
Dissolving a partnership can feel like a breakup or divorce. It means closing a very important chapter in someone’s life, and it is a decision that people often don’t make instantaneously.
Trying to find a comfortable way to broach the topic with your partner is important, especially if you want to protect your relationship. Try to approach the topic gently and ideally in person the first time, leaving things open-ended so that you can discuss it in more detail and they have had time to process.
Being pragmatic, patient and sympathetic towards your business partner can make a partnership buyout less contentious process for both of you.