Sometimes business partnerships do not work out. The partners decide to split up and operate without each other. Previously, we described how to structure partnerships to reduce the chances of partnership breakups. Even if partners follow all of the 8 keys described to structure successful partnerships, things can interfere to create unforeseen stress and conflicts between partners, that if not resolved or eliminated will destroy the partnership. As we stated previously, structuring a partnership poorly virtually creates the conditions where partner tension and clashes will occur.

We will discuss the key ingredients to creating the best possible outcome for all of partners and the partnership entity, with the least damage and cost to all parties.

Key #1 The partners must agree that reorganizing the existing partnership would be the best course for all parties. Many times, continuing a bad partnership is worse that restructuring new partnerships and businesses with different partnership relationships. The partners must agree to focus on a successful dissolution of the existing partnership for the mutual benefit of all partners.

Key#2 The partners must try to concentrate on creating the resulting separation conditions and structures that will benefit all partners as much as possible. Trying to win and beat other partners, or to hurt other partners will damage everyone. Bringing up old wounds and trying to get revenge for real or perceived past attacks will create even worse conditions than already exist. Focusing on creating more positive conditions for everyone will set the stage to turn unhappy and unsuccessful partnership relationships into two or more new business arrangements that will be much more successful individually.

Key#3 There is nothing wrong with the individual partners. It is vital for all partners to recognize and accept that a business partnership is a relationship between human beings, and if the partnership does not succeed, it does not mean that the individual partners are failures. The partners must refrain from attacking the other partners and especially themselves. The individual partners did not fail. Applying guilt and blame or complaining about past events is not going to help. Many times, there was very little, if anything the individual partners could do to drive the partnership to success, like when a partnership is poorly structured or poorly organized with ill-fitting partners.

Key #4 The individual partners must define in detail what they want out of the partnership. This is a discovery process for each individual partner, which will require open and honest exploration within for each partner. This is not a selfish act. It is needed to assure the best final outcome for all parties. Most likely, one of the main reasons the partnership relationship eventually did not work, was because the individual partners did not know what they wanted to do and did not want to do within the partnership and what they wanted to get out of the partnership in the first place. If this deep inner discovery process was not completed by all of the partners before the partnership was formed and structured, it will need to be done to create the best separation structure. If the partners do not clearly KNOW what they want from partnership restructuring, they and the other partners cannot create the best conditions for mutual success.

Key#5 Each partner will want to get help and support from someone who will assist you to discover and get your best possible outcome. This discovery process has been proven to be extremely successful by engaging a personal coach, by each partner, to obtain a clear, honest, and full picture of what each partner really wants and does not want. I would be remiss if I did not present this very valuable personal coaching process to assist all partners to achieve the highest possible successes, going into or separating from a partnership. Eliminating confusion, negative emotions and unwanted personal competition through personal coaching to focus on the truth and the future generates the best path for all partners to succeed.

Key #6 The partners want to openly share their clearly defined objectives for the desired newly structured outcome with the other partners. This way all of the partners will know, understand and operate from a much cleaner list of facts to build the best structure for all. Of course, this is where overlapping objectives will show up, where several partners may want the same resources or assets from the partnership, creating possible competition for these same assets. However, if the previous keys are being followed, this open and honest discussion will also provide the environment to find and create the most mutually beneficial compromises through trade offs and bartering. Having assisted many partnership restructurings, I can attest that honest and clear knowledgeable understandings by the many (previously warring and cantankerous) partners have generated remarkably fewer conflicting and competitive results than anyone had thought. Many times the causes for the internal partnership conflicts and clashes will be eliminated by the clean separation of the resources and liabilities of the partnership.

Key #7 Make the separations of the partners clean and complete. You want the newly formed structures to have as little if any connectivity to the previous relationships. By making a total and clean break from each other, the partners will be free to go about their business independently without carryover of any negative feelings or activities. If the partners want to reenter into future relationships, it can be done with open eyes and objectivity without any hangovers or past burdens.

Key# 8 Document the structure of the new arrangements and how it will be completed. The partners will eventually agree to divide the assets and liabilities of the former partnership. To make sure it is done completely and accurately, the detailed conditions must be recorded in writing and signed and agreed to by all parties. Preparing this document by the partners only without the intrusion or divisiveness of lawyers at the beginning has been shown to produce the clearest and most mutually beneficial arrangement for all parties. The partners who have followed the keys will be able to express on paper what each party will get and not get in their own terms that will be clearer and more complete than legalese. Remember, when lawyers are hired, it is their goal and job to get the best deals for their clients at the expense of others, most often by creating adversarial and competitive conditions, which in turn increases their fees. Obtaining legal council and tax accounting council afterwards to make sure all of the conditions spelled out by the partners fully satisfy legal and tax regulations are very wise.

Key# 9 Enjoy the new business relationships and structures that were created out of the rubble of the past partnership. You will want to use the pain of the partnership dissolution to motivate you to do what it will take for you to create you own newly formed successful business conditions. Many times some of the most successful and enjoyable partnership and business arrangements are born out of dissolving previous partnerships