THE SCENARIO
You suspect your business partner is stealing, mismanaging the business, spending too much, looking for greener pastures, or just plotting to cut you out. Trust me, I’ve seen all of these and experienced a few of these myself in having owned a number of businesses and having parted ways with a few (good riddance) business partners. The seeds of doubt have been planted, maybe even watered and are now starting to grow some little leaves. The point is, you can feel a breakup happening but you’re not sure what to do next. The answer is simple: get access to and gather information.
THE FIRST STEP IN ANY BUSINESS BREAKUP
The absolute FIRST STEP in any actual or potential business breakup (whether on good terms or bad terms) is getting access to and saving copies of all relevant information. The person with access to the most relevant information has the advantage. It’s just that simple. Whether your breakup leads to a full blown litigation or not, having access to critical information pertaining to the business operations, business dealings, contractual relationships, and financial standing will all be necessary to negotiate a settlement or to be successful in a lawsuit.
This means that once you’re on the verge of a business breakup (and also periodically for your own benefit) you should save important emails, save copies of company documents, contracts, financial statements (tax returns, bank statements, profit and loss statements, accounts receivables statements), and copies of all important emails and text messages. Remember on apps like WhatsApp, one can wipe out a conversation. It’s important to take screen shots to preserve those conversations especially where someone is making an important promise to you regarding any business obligations, debts, liabilities, or even admissions of fault.
When things don’t quite feel right in your business your best bet is to take control of getting the information you’re entitled to receive — which is usually just about everything that has to do with the business whether or not you’re a managing partner or not. Don’t make waves and don’t create conflict. Simply gather information and take inventory of what you have and what you don’t have.
For anything that you don’t have, gather it yourself to the fullest extent possible. So for example, rather than asking your business partner for bank records and tax returns, get that information yourself by either going to the bank if necessary, calling the bank, contacting the company’s accountant, etc.
Once you’ve exhausted all options, then reach out to your business partner to fill in any gaps without raising red flags. If someone asks you why you want or need information that you never sought before, you can simply reply that you’re trying to get more organized and ensure you have a better understanding of all aspects of your shared business so that you can also be a greater asset to the business. Not that you need to justify your request but its better to play nice to get what you need because later on it will be very difficult to obtain when the relationship has gone south.
