Ever wonder why partners keep secrets from each other? Why would one partner spring onto another that he has wanted to sell the business for the last 5 years and suddenly announces that he has found a buyer for his share, or even worse, for the entire company? Isn’t that the kind of thing you’d want your partner(s) to know so they can be involved in the search and in the selection of a buyer? Listen, there’s more…
“I’ve never told you this before but I’ve been wanting to get out of this business for the last 5 years and, don’t worry, I have a buyer to take my share. The reason I haven’t told you is I knew you’d try to talk me out of it and I just didn’t want to deal with that. So I’ve made it easy for you and have brought a buyer to the table.”
“What do you mean you’ve wanted to sell? I thought we had a good thing going here. We’ve made good money, sure we’ve struggled at times but always worked it out. And what do you mean you have a buyer?” “Who else knew about this? I can’t believe your saying or doing this? What if I want to buy out your half?”
Is this starting to sound like a marriage on the rocks? It’s not much different. So when does the marriage counselor come in? It may not be a bad idea.
Partners in business come close to a marriage in relationship. They may share things with each other they don’t share with their spouses, they harbor protective attitudes about their business and even agree to skim some off the top once in a while to go out and have some fun or just use for their families. And no one ever knows different, it’s their little secret. The relationship becomes tighter.
THEN, the economy takes a dip and business suddenly or a new competitor arrives and it isn’t as much fun as it used to be. Revenues drop, profits disappear and it’s time to cut the workforce and tighten expenses. Where do we cut? Who do we cut? What about us? How do we deal with us? Unpopular decisions have to be made and disagreements develop. The relationship changes. It starts to unravel. If this is a family business, it could get even uglier. Michael is a controlling partner. He likes to be in control of the situation all the way through to get to his desired outcomes. That leaves John constantly having to defend himself since the transaction is either in progress or complete.
The better way to handle this situation would have been for Michael to speak up from the beginning. Knowing that John would get defensive about it or try to talk him out of it, Michael needs to let John present his views and opinions. This will diffuse any potential quick reactions to a surprise attack.
A few tips for working with partners:
- Meet – regularly to hash things out and say what is on your mind.
- Communicate with your partner(s) – whether by phone, email or personal conversations.
- Listen – that is the other part of communication. Listen without interrupting and try to understand how they feel about the situation. DO NOT listen while crafting your answers in your head; that is not listening.
- Negotiate – don’t try to have things go just your way. The end result will cost you more and get you less.
- Gratitude – appreciate what your partner(s) have brought and bring to the table. They have a contribution that has made it possible for you to get to where you are today.
- Whatever you settle on, make sure it is in written form and if necessary, in a legal format.
Partnerships work and work well. The key is constant and quality communication. Speak, listen and appreciate.
Leading Edge Business Strategies, LLC is a consulting firm for small businesses. Paul Beaudette is the President and has over 30 years of successful business experience creating profitable financials increasing market share and adding to revenues.