Justin and Romero ended their 15 years as successful business partners when it became apparent that their previously compatible visions for their business and personal lives were now taking them in two different directions.
Justin and Romero had been successful partners in a growing chain of do-it -yourself stores for 15 years. The mission of the business was to provide easy access to low cost supplies for homeowners involved in do-it-yourself home projects.
There was a 20 year age difference between the partners. Justin was younger and more of a risk taker; Romero was more cautious. They respected and trusted each other’s opinions and easily made decisions together. Investments of profits, adding new stores, dealing with suppliers, employees, changing their inventory focus based on changing markets over the years were typical discussions for them.
Fifteen years after they began, Justin, interested in a broader market reach, wanted to take major risks by adding additional services such as a food, household supplies and a pharmacy. This would not only change the focus of their clientele, vendors, marketing strategy and ultimately taking risks they previously avoided.
At the same time, Justin was eager to move into this new level of business, Romero was thinking of retirement. He was becoming more cautious and did not want to forge ahead with new risks. His desire was to maintain his financial solvency allowing a comfortable life style and not risk losing money that he would need to take care of himself and his family through his remaining years.
Obviously these opposing changes in the partners’ personal visions created a dichotomy in their previously agreed upon purpose and vision for the business.
Because the communication between the partners had always been open and respectful of each other finding a win/win resolution to end the partnership was not difficult. They had wisely written a comprehensive exit strategy into their Business Partnership Agreement at the outset. They addressed issues such as buy-outs and had insurance policies in place in case one of them became disabled or died. Both enjoyed good health and were able to agree on the value of the business, a buy-out price and payment plan was considered fair by both.
Ultimately, Justin found a new partner with whom he could operationalize his expansion plan and Romero retired.
When a change in vision occurs, it can tear people apart. The keys to avoiding deterioration of the relationship between partners is to have a comprehensive exit strategy and continue to talk openly. Being committed to a win/win outcome for each other and to the ongoing success of the business are essential elements.
When partners have maintained a close and open relationship the concern and care for each by the other is also a given. So when differences occur they can be managed in a manner that provides an outcome that benefits both.
The story of Justin and Romero shows how changes in personal visions can have a direct effect on the business and the partnership. Communication and commitment are always the keys to success.