Beginnings are so much more fun than ends.
Whether you are starting a new relationship, setting off on a holiday, or bringing a new baby into the world, we commence adventures in life with excitement and energy. But things aren't so pretty at the other end of the journey. Relationships may end in divorce, the tan from a vacation fades, and death is the only thing in life that is certain.
The same can be said in business partnerships. In the beginning, plans to get entrepreneurial efforts off the ground often steal the time and focus of those involved.
I've witnessed many acquaintances who decide that starting a business alone is frightening.
They are much more comfortable sharing the responsibilities of financing, owning, and managing a business with a partner. Together they dream and plan every detail of their business, except how it might end. Who wants to think about ending a business before it's truly started?
Identifying how to dissolve a business and/or a business partnership seems to be a cursed conversation that many entrepreneurs avoid having. It is almost as though having a discussion and drawing up a contract for a graceful ending to a business may present a bad omen.
In reality, it is quite the opposite.
Having those difficult conversations about how to end a business relationship with a partner is not only a good financial decision but it could end up saving the relationship itself. A solid contract with an exit strategy for each partner, articulating the process and expectations should one partner chose to leave the business, is the ultimate prenup for business.
A lawyer will help walk both partners through the contract process in order to cover everything from how to split the financial cost of business dissolution to how to handle existing customers and projects.
An exit contract will usually be built into a larger partnership agreement. A solid agreement which outlines the terms of the partnership, how decisions are made and a division of business responsibilities, is an entrepreneur's best chance at setting a solid foundation with a business partner right from the beginning.
Don't skip this step in order to move onto the bright shiny parts of running your business.
Much like insurance policies, legal wills, and travel insurance, creating a partnership agreement with an exit strategy is a boring necessity for the 'what if' moments in life. They aren't as much fun as choosing a business name or setting a restaurant menu but you'll be glad you have it to lean on if things fall apart.
Until next week, stay in the black and keep coming back.
