Entering and Exiting Business Relationships

By Diane M. Calabrese

 

It’s possible to be busy without interacting with another person. It’s possible to be busy at one’s business without interacting with another person, too, such as painting a landscape or practicing a violin. Yet no one who is doing business, or striving to earn money through the work that occupies the day, can succeed absent knowing how to enter and exit relationships. The artist must sell canvases, and the musician must sell recordings or tickets.

For commerce to go smoothly, everyone engaged in business (and busy is the root word) must know how to interact with others in a transactional way. Business owners enter relationships with vendors, customers, and sometimes partners—as well as many others, such as neighboring businesses in the same building. And they exit them.

Business relationships are like all relationships. They require attention, time, and awareness. Are some business relationships more difficult than others? Yes, they probably are. The complexity of the link can, in itself, make it more challenging. Consider the business partner.

“I think that a partnership is the most difficult relationship to enter,” says Everett Abrams, the ‘Wizard of Wood’ and owner at Deck Restoration Plus in Shamong, NJ. “When we are talking about business owners, we are talking about dominant, or ‘type A’ personalities, which can be difficult when it comes to decision making.”

By recognizing that those who establish businesses are take-charge sorts of individuals, an owner can enter a partnership successfully by completing the necessary preliminary steps. “The best thing is to determine how decisions will be made prior to starting the relationship,” says Abrams.

Having a business partner is not entirely unlike having a spouse. If two people have had a thorough discussion and achieved a good understanding of how they will function as a unit—who will pay the bills and how they will apportion their time—before marriage, they have fewer disagreements, more harmony, and can generally look forward to being together until they are parted by death.

Business partners will probably sever ties when one decides to retire or sell the business. Even so, they will experience the same sorts of benefits from pre-planning. “Typically partnership relationships work well when everything is roses, but in difficult times, these relationships become stressful,” says Abrams. “Respect and integrity are two musts in this type of relationship.”

When a partnership must be exited for whatever reason—from changes in the health status or retirement of one partner—the esteem the partners have for each other can make all the difference in easing toward an uneventful conclusion. (So, too, of course, does the preplanning.)

If a partner decides to exit the business relationship and there is disagreement over how it should be done, it can be a problem. It can be more complicated to get out of a business relationship with a partner than to get into it.

Cutting ties with a partner can be the most costly exit to negotiate “especially if lawyers become involved,” says Abrams. “This doesn’t usually happen with vendors and customers.”

Be prepared for the unexpected. That’s what Abrams advises. “I think that it is best in any relationship to prepare for the worst case scenario ahead of time and plan accordingly,” says Abrams. “This can be done with a legal document so that you know how issues will be handled when they come up. A willingness to compromise on both sides helps as well.”

Expect and Reflect The Best

The essentials of entering and exiting business relationships are as old as commercial dealings. “Treating the other party the same way I would want to be treated” is a fundamentally good idea, says Abrams.

And if there must be an exit, what then? “Staying true to myself and my beliefs during the process” is the thing to do, explains Abrams. That means one should not react in kind or “become the other person if the situation escalates.”

Cooler heads prevail is an adage with much merit. And it sums up nicely the recommendation of not responding in a testy way when one has one’s patience tested. No, it’s not easy, but almost nothing worth doing ever is.

“When leaving a business relationship, it is best that even if you do not agree with the other party and you move on, that you maintain respect,” says Abrams. “I have had many people tell me they do not agree with me but respect me in the end. Never burn a bridge.”

Good advice about the entire scope of business relationships can be found in sage nuggets like the recommendation to not burn bridges when leaving. (You might want to go back, after all.)

“A partnership is much more difficult to enter in because of legalities and contracts,” says Kevin Porter, the owner of Envirotek Cleaning Systems. LLC in Longview, TX. Similarly, he explains, a partnership relationship is difficult to exit because it is necessary to “resolve” all the legal issues before making a separation official.

“But in our business, our vendors and customers are our partners,” says Porter. “I wouldn’t be in business without them.” The basic element in all business relationships, says Porter, is simple. “It’s like any other relationship,” he says. “Be honest, and do what you say you’re going to do.”

Look at vendors and customers and every other individual with the same good will. It’s the place to start whether they are a partner, vendor, customer, or owner next door. “I want to treat them the way I want to be treated,” says Porter. “That’s the most important thing.”

As Porter and Abrams observe, mutual respect begins with each person putting their best foot forward another timeless aphorism. Something could still go wrong and toes could get stepped on now and then, but it will not be for want of trying. The more we expect of ourselves and the more we reflect good intentions, the more likely it is the positives flow in both directions.

The Toughest Exit?

A business owner must also know how to exit. Not having a succession plan, or outlining what happens to the business when the owner leaves, can put employees in a difficult situation.

An owner should have a succession plan. It may not seem like a priority with all the other sorts of activities that go into sustaining and growing a business. Yet even a business owner must sometimes exit the relationship he has with his business. A succession plan ensures that there will be a strategy to keep the business going.

There are many ways a business owner can leave a business. An unexpected illness or passing can create upheaval for the very team the owner has trusted across many years in building the business. Perhaps the team will include family members.

Often, though, a business owner just decides to sell a business to focus on another business or pursuit. An exit plan—one with the details of who will handle the transition, whether employees will continue to be part of the business after the sale, and so on—is a must.

Get help with succession planning from the U.S. Small Business Administration (SBA) with its archived documents, such as “Plan Your Exit” and “Selling Your Business,” which are available via the links www.sba.gov/content/plan-your-exit and www.sba.gov/content/selling-your-business. Be prepared.