Business Partnership Advisor
Together, we can fix your business and partnership problems
Chris Reich, Business Luminary
When to Give in Partnership Negotiations
There are times when I recommend showing compassion during negotiations with a hostile partner. I never start by giving things away, but once people are able to talk in a civil manner, it’s wise to extend an olive branch.
A Time to Hold Firm and a Time to Give
Clients are often surprised when I recommend offering a reasonably generous concession. I always consider the future as part of my strategy. If you’re in a business partnership that has gone sour, we have to consider whether you’ll continue in the relationship or leave the business. If my job is to get the relationship back on track, I’ll encourage you to give a little but only after your partner settles down.
Consider the Goal
In a tense partnership, I often see the same dynamic. One partner is very strong, probably a bully, and the other is typically passive. The bully demands change, generally in his favor. He wants control of everything. The other partner, who doesn’t like confrontation, will either agree to anything or pull back into a shell to avoid a fight. When this pattern goes on for months or years, the bully learns how to get what he wants and the pacifist suffers in silent stress until reaching a breaking point. I get the call.
I always ask about what the ideal solution looks like. Some people say that they want things to get back to the way it was when they started the business together. Some are so stressed that they want out of the partnership. And some want the other partner, the bully, out at any price. The interesting thing about these possibilities is that we usually can make any of them come true. Together, we can repair the partnership or get you out. No matter how bad, if fixing the relationship is the choice, it almost always can be done! Be careful about what you choose.
Once we have determined the desired outcome, we go to work with that goal in mind. If your partner is willing to talk, we can make excellent progress within days. Both parties will have to give a little but not before things cool off.
Step 1 to Business Partnership Resolution: Cool It!
The very first thing we need to do is get the temperature down. I do a little shuttle diplomacy to get the hostility under control. That means me talking to all parties by phone so that everyone can get to know me and see that my style is nothing like a lawyer. I’m not going to threaten or battle to help anyone ‘win’. If someone wants victory, the situation requires a lawyer and a lot of money. Peaceful resolution is cheap. Once I get the conversation started, resolution is right around the corner.
No matter what the goals in a tense partnership negotiation, it always pays to be a decent person. Give a little, get a lot.
Chris Reich is an excellent Business Partnership Mediator with a Proven Track Record.
What to Give
What should you give? It depends on what is at stake. I never recommend changing equity positions. If you’re in a 50-50 partnership, never give up control. Read more on that subject here
Recently, I worked on buyout that was pretty tense. The departing partner wanted her health insurance paid for a year. The remaining partner said, “no”. I stepped in and advised otherwise. Why not? The business can afford it and we don’t know if there is a health issue in the background that we don’t know about. They may have to stay if they can’t keep their insurance. Give. We did and it changed the tone of the negotiation.
I once saw a deal stop over a cell phone. There can be an apparently minor thing that actually is important to the one making the demand.
Sometimes people just need to win a concession to feel like the deal is good. Consider just how important or costly something is before denying the demand.
I always counsel my clients to consider whether they wish to win an argument or to get what they want. If you want a peaceful conclusion, give a little.
Don’t let pride or a desire for payback keep you from the deal you deserve. Give a little and get it done.
Chris Reich, Business Mediator
“There is no shame in making a few concessions if it helps you get the outcome you want. I have never seen a situation where being a decent person didn’t pay off. Don’t be door mat, but don’t let a simple thing destroy your deal.”
Locking a partner out is a risky move. The locked-out partner has rights that if violated could entitle him to reinstatement and damages.
There are many things to cover in a solid Partnership Agreement. In this video, I’ll explain the items that need to be covered. You may have other items to include as well. Keep in mind that there are many ways to address each clause. My job is to offer you options and to help partners agree on how they want to address every line item.
Your Partnership Agreement protects your interests. Ideally you would go to a qualified business attorney and have the proper legal document drafted. But if you are putting it off because of the expense, you can get the key items on paper to protect you and your business.
There are times when you legally can and should lock your partner out of the business. But, those are rare circumstances. Locking your partner out, even if your partner is showing bad behavior, open you to potential liability.