So you would like to know how to get rid of a bad business partner. It is known that starting a business is never easy. Running it can be quite tricky too. So, unless you’re an expert with an excess supply of resources, chances are you might need to team up with someone down the line.
The thing about business partners is that not all of them are worth their weight in gold.
You win some, you lose some; you get lucky, you strikeout.
A bad business partner can affect the process of setting up a business.
He or she can also be detrimental to daily operations.
Also, he could affect the sentiments and motivation of everyone on-board.
This is why you want to get rid of the said bad business partner as soon as possible.
If you want to know how to get rid of a bad business partner, you first have to know how to spot one.
This can be a lazy business partner.
It could also be someone with the propensity to make bad business deals more often than what’s acceptable or tolerable.
There are several signs of a bad business partner that you should always be mindful of if you want this termination process to be as seamless as possible.
How To Get Rid Of A Bad Business Partner
Spot The Bad One First
When it comes to business, of course, you won’t tie up with just anyone.
There needs to be a certain level of trust, confidence, and belief that everyone on-board can contribute to the success of the project.
However, just how well do you know the people you’ll be working with?
For example, you can be friends for so long yet not function well together in a business environment.
Your friend can be great and all but when it comes to business, he or she can be a lazy business partner.
Now, dealing with business partners is not rocket science but some professionalism is to be expected.
Especially if you need to learn how to get rid of a bad business partner.
Therefore, just like how you attend to business dealings, you should practice the same rationalism when choosing people to work with.
It’s not enough that you’re best buds.
Before you start pooling people in and brainstorming for your next big venture, make sure you take a step back and think.
With a businessman’s perspective, ascertain how much your desired partners can contribute to what you’re planning on achieving.
Do they share the same vision, goals, and will they invest time and effort moving forward?
Have you worked with them before or do you know others that have?
Now is maybe the right time to start asking around.
Think of it as hiring a service company.
You won’t just jump in without proper information and feedback now would you?
In this case, there’s much benefit that comes with meeting business partners before anything is finalized.
Here Are Some Of The Ways You Can Spot The Bad Seeds Early On
Thus saving you from costly business partner problems in the future.
Is Your Gut Telling You Things Are Too Good To Be True?
Chances are, they probably are.
For most things in life, if they’re too good to be true then they probably are.
People tend to boost their resumes and over-promise when it comes to their skills, connections, and the like to increase another’s confidence in them.
When it comes to dealing with business partners, the first step is to do your groundwork.
Spending time on this now will save you from a whole lot of trouble later on.
Including scurrying to find the answers to how to get rid of a bad business partner.
Are They Involved In The Business With Ulterior Motives?
It’s not uncommon for people to have their agendas especially when it comes to business ventures.
But when it comes to business partners, it’s ideal that you share the same mission and vision.
Apart from this, you should also be well aware of your potential partner’s current dealings.
Consider this as you check to see what other opportunities you can capitalize on by working with this person.
This can also be your saving grace if your potential partner may only be in it to get your idea and remove you from the situation.
Can my business partner push me out?
Yes, yes he definitely can!
Thus the necessity of knowing when and how to get rid of a bad business partner.
Is There A Mismatch When It Comes To Efforts And Expertise?
The thing about working with other people is that there’s more benefit to the partnership when everyone can offer different expertise to the mix.
You always want to be with people who have skills that you don’t.
You need to be aware of your partner’s expertise and skill set.
There’s a difference between people who want to be part of the in-crowd and those who have something to contribute.
Here, in knowing how to get rid of a bad business partner, always go with the latter.
Is There A Considerable Imbalance When It Comes To Their Work?
One of the signs of a bad business partner is him not delivering an equal amount of effort to the project.
You should always be aware of who’s doing what kind of work and how much time they’re putting into every effort.
Everyone needs to pull their weight.
For example, it’s not just about sharing ideas and leaving someone else to spend hours on end executing them.
Even if someone’s strategy planner, that shouldn’t be the extent of his work.
While another executes the plans, he should be helping out in some other way.
Like responding to emails, meeting potential clients, and so on.
Lies, Lies, And Even More Lies.
Some of the most common business partner problems start with people who aren’t honest with the team or even themselves.
When you have someone who masks even the most menial of things then you should rethink involving this person in the project.
You want people who’re accountable and focused on growth rather than those who are immature.
Again, necessitating the need to know how to get rid of a bad business partner.
A small hiccup, when left unaddressed, can lead to costly issues.
So instead of having people hide things for whatever reason, you want partners who can admit fault and work towards rectifying the situation, leave it at that, and move forward.
Do You See Yourself Having A Relationship Outside Of Work?
You may want to consider evaluating a business partner for the simple reason that you can’t see yourself having a relationship with this person outside of the business.
Work with people you can consider as a family as there’s a deeper level of trust and confidence in this type of setting.
Keep in mind that you’ll be spending a lot of time with these people at work.
It’s not just about business; the entire thing will become a new normal for you, your new lifestyle.
How To Get Rid Of Your Business Partner
Now that you’ve learned a thing or two about how to spot a potentially bad partner, the next thing you have to do is learn all about dissolving a business partnership.
Can my business partner push me out?
Yes, but before that happens, you can take proper action if you know how to get rid of a bad business partner.
Now you might not be the type of person who’s into this whole firing scenario but when it comes to business, especially your business, you have to put your foot down at some point.
In reality, you have to do this several times down the road.
You don’t want to fall into a cycle of bad business decisions so eliminating problem spots early on can be truly helpful.
Understand this, when you have a good partner, it significantly lowers your overall investment in the business.
This is because this person can help you reduce costs by working more effectively.
When it comes to the subject of efficiency and stability, the idea of dissolving a business partnership when necessary becomes quite easier to absorb.
Apart from improving efficiency, a good business partner can easily reduce your workload and improve the business by providing relevant insights and feedback whenever possible.
But as previously mentioned, knowing who’ll be a hundred percent match won’t be easy.
More often than not, even with all of the groundwork, you can end up with someone who won’t turn out to be the partner you expected.
At some point, firing a business partner becomes part of your reality as an entrepreneur.
In some cases, you might start working perfectly together but somewhere along the line, the need to remove your business partner becomes more adamant.
Again, you have to address the issue when you feel that the existing partnership is no longer beneficial to the business; and of course, to you.
At this point, your knowledge of how to get rid of a bad business partner prevails.
There are two main methods of going about this.
As you’re meeting business partners, it’s ideal that you discuss these things as well.
It’s not that you’re focusing on a potential dissolution.
It’s just about clarifying everything so that everyone’s on the same page moving forward.
Partnership Dissolution Agreement
You can remove unwanted business partners by enforcing a partnership dissolution agreement.
It’s probably one of the simplest approaches in the book but does require some initial planning.
As you plan your business blueprint, talks of the said agreement should already be drafted as well.
Most businesses and partnerships for that matter don’t start with discussions of breaking up but this is a good precautionary action to take especially since no one can foretell the future.
Just like getting sufficient insurance to cover the business and its resources, this is your insurance policy protecting you against bad partners.
It’ll be wise of you to include not only a buyout plan but also ownership clauses when you create the business contract.
Early on, all partners should be well aware of the details and requirements involved in the partnership dissolution clause.
If everyone’s on the same page, and agree to the details, then you can reduce problems when the time comes for some of you to part ways.
As much as possible, remove all personal sentiments and emotions from the picture.
Most of the time, people choose to stick with unreliable folk because they simply can’t handle the firing process.
Thereby exposing the fact that they are clueless about how to get rid of a bad business partner or just won’t.
But if you’re going to work with the same people every single day, you don’t want any animosity to be present.
You want to be as comfortable as possible because if not, you won’t be able to do good work.
When it comes to the business, have the perspective of a business owner.
You can be friends outside of work but within the partnership, everyone should be as professional as possible.
Focus on the business, what it needs, and the goals that you want to achieve.
If someone isn’t contributing to these, they aren’t meant to be part of the equation.
Be honest and straightforward.
Layout the problem and make sure that your recommendations for dissolution are backed by facts.
You can follow a buyout plan or negotiate something different.
It’s best if you and your partner can come to some agreement and honor it.
This will save you from timely legal hassles.
Depending on the situation, you can initiate a buyout or ask your partner to buy you out.
If you go for the latter, you can simply focus your attention on starting a new venture with the buyout funds you’ll get from the deal.
Now, this is a last-ditch effort should your partner decide against the dissolution.
It’s better than staying in an unfavorable relationship.
Dissolution by Partner Shares
This is another method about how to get rid of a bad business partner.
There are different ways to organize investments in a business.
Especially when there will be multiple owners, the business can issue partner shares.
This does not have to be of equal percentages across the board.
It also doesn’t have to be dependent on monetary contributions.
There are times when partners invest connections, expertise, and other things worthy of the same number of shares as thousands of dollars put into a business.
Now the process for this is as follows.
When you’ve identified the final roster of partners, they’ll now be referred to as shareholders in the legal business contract.
Stated on this contract will be the number of shares owned by each individual and their value in dollars.
To dissolve your partnership through shares, there should be a provision in your contract for a buyout agreement.
This will be accessible to all shareholders.
When there are shares involved, this is the only way for you to rid yourself of a partnership that’s no longer working.
Especially when there are only two people involved, this is the easiest way to remove one partner from the mix.
The provision will allow either of you to initiate a buyout when necessary.
On the contract, there will be a selling price stated for all shares.
There will also be a predetermined period within which the buyout can be executed.
It would be better if either party when the time comes, can solve the conflict internally.
But when there’s a partner who’s unwilling to let go of his shares, a force-out may be in order.
What you have here is something that only a majority shareholder can initiate.
This is the reason why most business owners ensure that they hold 51% of a business.
The option for a force-out must also be in the shareholder contract.
Otherwise, you can’t force minor shareholders to sell their shares at a predetermined time and price when you see fit.
If you miss out on this and fail to include it in the contract, don’t worry.
You’ll still have a way to remove a partner when needed.
You might be able to take out minor shareholders from the business even without a buyout policy.
This might be allowed if they’re employed by the business.
Considering how employees can be terminated with sufficient reason, using this strategy towards employed minor shareholders can force them to sell their shares.
If this is the type of dissolution strategy you’re planning to initiate, see to it that you have other partners or shareholders backing you up.
Even if you hold most of the shares, having their support will make a big difference.
Depending on the situation, it may even ease feelings and encourage the bad partner to give in without much of a hassle.
Now if you don’t own most of the shares, get the support of the other partners. This way, you’ll have enough shares in total to become the majority.
This will allow you to force the decision to go your way.
If there are five of you with 20% each, get one or two partners on your side to force the majority decision.
As you may already know, partnerships can be beneficial in more ways than one.
But you can never be a hundred percent certain of the reliability of the people you choose to work with.
So, do your homework before finalizing any partnership and protect yourself by having dissolution clauses in the contract.
It’s never easy to get rid of people in business but at some point, you might have to do it.
Otherwise, you might stand to lose your business and everything you’ve worked so hard for.
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