Here are some things to consider at various phases of any partnership in order to ease tensions between or among partners, or head off potential problems and upsets.

Before setting things in stone it is useful for partners to: clarify business purpose, define individual roles and responsibilities, set initial remuneration guidelines, and create financial budgets. All this helps to make sure that partners are working off the same business page. Also, writing up a formal partnership agreement is essential. This agreement should cover things like: scope of individual and collective decision-making authority, how the business will decide which advisors (lawyers, accountants, bankers, etc.) to use, what happens if a partner gets disabled, dies, or wants to leave the business, and what happens if all partners want to close or dissolve the partnership. Asking some tough questions up front, before signatures are put to paper, can save major headaches down the road. Also, critically consider what would happen in the partnership if the success of the business either exceeds your wildest dreams, or fails to meet your expectation. I have seen many business partnerships falter and leave bad feelings because these considerations were not addressed in the early stages of the partnership.

Partners need to meet regularly to review company financial performance and make collaborative business adjustments. Business strategy and direction need to be examined annually (more often in a new start-up), and away from the office. Partners need to be continually communicating in order to keep the business wheels well oiled. One business partner I know once went six months not talking to his counterpart because of major differences between them about organizational priorities. Obviously, this hurt the business and the partnership. When the going gets tough, using appropriate and capable business advisors (or a trusted, mutual friend or colleague) as mediators can help to get things back on track. Also, one can really tell the strength of a partnership when the business goes through a crisis or major change, or when one owner goes through a personal crisis.

Like marriages, all partnerships can go through their tough times. Also, partners’ reasons for being in the partnership may change. If differences or changing expectations are not handled early, then it can leave a lasting scar on the partnership. Having good business advisors (or objective colleagues) to talk to can help partners see things more objectively. Also, confronting one’s partner(s) with concerns and frustrations can sometimes shake some sense into the situation and wake partners up to the consequences of major unresolved differences. In these situations, focusing attention on future partnership possibilities, rather than past partner transgressions can help to get the partnership back on track. If, however, there is too much "bad water under the bridge" because of recurring patterns of disagreement, then talking about how to amicably separate may be the only logical alternative.

The souring of a partnership may not be the only reason to end a company partnership. The business may be coming to the end of its useful life, there may be no logical successors for the continuation of the company, or partners may want to retire or move on for personal reason. In all these cases, being able to speak face-to-face with your partner(s) about these considerations is important. However, if partner tensions run high then having an objective and knowledgeable outsider work to iron out differences can be helpful. Also, as mentioned earlier, a good partnership agreement will make this ending less turbulent. 

Lastly, it’s healthy for partners to find independent, arms-length advisors (lawyers, accountants, consultants, professional mediators, etc.) instead of using advisors who are personal friends or relatives of just one partner. Business advisors need to be able to provide objective advice focused on what’s best for the overall business and partnership. Also, advisors need to be neutral mediators so that they can help partners examine and settle their critical differences, which are inevitable in any business, as in any marriage.

Good business partnerships can be formed with the right complementation of individual expertise and interpersonal chemistry. Yet having them last and thrive requires a concerted and continual personal investment in making the partnership work effectively.


Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .