Business partnerships can work out very well. However, like most professional relationships, they generally have an expiry date. You may feel like the time has come to buy your business partner out.
While this is typically possible, it’s important to ensure that you have adequate protection in place. After all, you’ve worked hard for many years to establish your company and the last thing you want is to put it at risk.
Outlined below are a few things to bear in mind:
Get an accurate valuation of the business
One of the first things you want to address is how much your partner’s share of the business is worth. This process can be complex. Profits from previous years and forecasts for the years to come will have to be examined carefully. Ideally, you and your business partner will be able to agree upon a fee that is equitable to everyone involved.
Communication doesn’t have to shut down
Buying your business partner out may carry negative connotations with it at first, but it doesn’t have to be a bad thing. Buyouts don’t just happen because business partners have fallen out. Your business partner may want to move on voluntarily or you may simply be making a decision based on the best interests of the company. In other words, the buyout can be amicable. Hold a conversation with your business partner and set out your expectations, or listen to theirs.
Of course, even in an amicable buyout, it’s important to make sure that your interests are protected. Having legal guidance during this time will help to put this in place.