Looking to buy a business with a partner?

What happens when you disagree? I addressed this question on LinkedIn this week and am reposting here to the extent others find it helpful. When you and your partner disagree, it can lead to a deadlock. Whatever the reason for the deadlock, you could be in trouble. Depending on the underlying issue, it could paralyze your business. You should therefore think about this in advance and plan for it in your partnership agreement. The least drastic option is mediation. Yet mediation may only get you so far. And the next step up is a big one: Forcing a partner from the partnership. There are many ways to approach this. For example, one partner can notify the other partner that she is offering to buy the other partner’s interest in the partnership or sell her own interest at a stated price. The other partner then gets to decide whether to buy or sell at that stated price. This is affectionately known as Russian roulette. Alternatively, each partner can send a sealed bid to an independent party setting out the maximum price that she is willing to pay for the other partner’s interests. The partner with the highest bid wins and must buy the other partner’s interests. There are other methods. But you get the idea. If mediation fails, you may have to press one of these nuclear buttons. And if so, you may come out on top, you may not. There are many benefits to buying a business with a partner. But don’t be naïve and think you’ll always agree on everything. Deadlocks are real. Have a plan in place to deal with them.