Plan B: When the Partnership Goes South

What’s worse, a partnership that goes bad after a few years or after just a few months?” Landon (not his real name) was almost in tears. “Before the launch, it seemed we were on the same page, but it wasn’t a matter of weeks before I could sense we had a different vision. I feel like such a failure.

Sitting at Starbucks with a man who’s about to cry is a bit awkward. I felt terrible, too, not having pithy advice to make him feel much better. Landon and Trisha (not her real name) launched their business only four months ago, yet their working relationship had already fallen off the rails. Landon explained, “Trisha started giving advice she wasn’t qualified to give, and she began to question some of my hiring decisions. If she didn’t want to be in business with me, I don’t know why she agreed to become my partner.”

Trisha was no neophyte. She had already launched and sold one company. Having made a lot of money on that deal, Trisha was enjoying life as an angel investor. Neither she nor Landon was ready to sell the business. They knew if they bailed now they would lose all or most of their investment. But they were stuck, Landon didn’t want her help and Trisha didn’t think Landon had the skill set to run the business without her direct input. We’re talking rock and a hard place.

If there was any good news in this dilemma, it was Trisha and Landon’s openness to third-party feedback. I was retained to help them mediate a mutually satisfactory operating agreement. But I made my opinion clear at the outset. A bad business relationship can seldom be fixed through a legal document. Success in business requires a nimble responsiveness to always changing market realities. I don’t know any lawyer who can write nimbleness into an operating agreement.

I wish I had studied psychology in college because understanding human behavior is the most important aspect of being an advisor to business owners. My experience tells me this, once a business relationship has gone south, it’s very hard to fix. You can put a Band-Aid on it, but seeds of distrust and discord have a way of growing into intractable problems. Sometimes it’s better to start the separation process and go to plan B, even if it’s only been a few months.

 

JIM CUMBEE is President of Tennessee Valley Group, Inc. a retainer-based business brokerage and transition mediation firm in Franklin, TN. Cumbee is an attorney and has an MBA from Harvard Business School. He has a wide range of corporate and entrepreneurial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee.

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Tennessee Valley Group

Jim Cumbee established Tennessee Valley Group to help business owners fulfill their dreams for life after business ownership. It’s a mission that his 30+ year career history had prepared him well for—in addition to being an attorney, transition mediator and business broker, Jim has been a buyer, seller, and entrepreneur. His broad range of experience gives him unique insight into how business buyers and sellers can achieve their goals.

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