Good Business Partner
Good Business Partnership

Have you ever considered starting a business with someone and wondered if they’d make a good business partner?  Or are you already working with a business partner and see some poor qualities?  Is the problem fixable, or do you need to end the partnership?  These things can be hard to recognize and realize that you have a bad business partner, but if you are asking these questions, you need to evaluate your situation.  The quality of your decisions and the success of your business overall are deeply affected by who is on your team. A bad business partner can affect your success in all the wrong ways – and it’s not always easy to know how to deal with a bad business partner.


Reputation is everything, especially as a new entrepreneur. When you have a bad business partner, your reputation will suffer. Depending on the issues, a bad partnership could lead to loss of clients, a toxic company culture and an inability to find ways to increase profits. Worse yet, if your partner is unethical or engaging in fraudulent behavior, it could even mean fines or legal action against your company.


The best way to avoid dealing with a bad business partner is to know what to look for so that you can avoid going into business with them in the first place.  Making the decision to go into business with someone isn’t some that you take lightly.  Just because you are friends, family or you’ve done some other business before, doesn’t mean that this person will make a good business partner.  You must objectively look at the good qualities along with the bad to make a confident decision that they’re a good fit for you.

If you’re at the point where you are thinking about going into business with someone, you might want to consider utilizing a business coach to help you determine if it’s a good fit.  A business coach will meet with both parties and help you see if you are compatible in areas such as communication styles, goals, work ethic and vision for the company.  A good business coach will also be able to assist you in working through potential issues early on before they become something major.  Keep in mind, this is likely on of the biggest decisions you’ll ever make.  It will pay off in the end to perform your due diligence in ensuring you are selecting the right business partner.


Bad qualities in a business partner are sometimes obvious, most of the time the signs are very subtle and progressive.  Unfortunately, bad business partners come in all shapes and sizes, from liars to complainers to reluctant communicators – there is no one size fits all bad partner.  If you have different values but there are no concrete problems, it can be harder to recognize that you have a bad business partner. But just as in personal relationships, when you know what a healthy partnership looks like, you’ll be able to determine if yours fits the description.


If your business partner seems to always have a problem but never a solution, that’s a bad sign. Everyone needs to vent from time to time – that’s a part of human behavior. But if that’s all your partner does, toss them a hint about the power of positive thinking. It is possible for them to change their mindset, if they are willing.

This is another area where business coaching could come in handy. How to deal with a bad business partner often involves a significant amount of counseling and work on both of your parts to move forward in a more positive direction. However, if your partner is not willing to take an active role in coaching, it’s time to consider alternatives.


We’ve all made some questionable financial decisions, and we’re not saying that this is necessarily one of the bad qualities in a business partner. But a long, poor credit history, previous bankruptcy or being banned from running a business are big red flags. Also, be aware of other projects they have their hands in currently even successful ones will give you an idea of the type of business partner they will be. Your business partner must openly disclose any past business failures or successes to you. If you unearth something they’ve been hiding, this could be an indication that you’ve chosen a bad business partner.


You don’t need to have the exact same values as your business partner. In fact, different values and perspectives can be a good offset to a partnership as long as communication is open and you understand which communication style your partner has. In most cases the differences in your partner can be your greatest asset and is no way an indication of a bad business partner. If you find yourself fighting over things like expenses and bonuses, or if one person wants to accept a lot of pro-bono work while the other is totally focused on money, that can spell disaster for your partnership. A shared agreed upon company vision is important, as is agreeing on how to achieve that vision. If you’re too far apart on these issues and neither of you is willing to budge, it’s probably time to look at options to go your separate ways.


Partnership agreements provide a roadmap for a partnership and are useful whether you are dealing with a good or bad business partner. It maps out partners’ roles as the company grows and what happens when it becomes successful; it also maps out an exit strategy if the partnership goes south, helping you to answer the question of how to get rid of your business partner.

If your partner won’t sign an agreement, this could be an indication that they have something to hide or that they’re already thinking of ways to get out of the business. Neither of these is good for the future of your company.   You must take it as one of the signs of a bad business partner. If your partner won’t sign an agreement, look elsewhere for a different partner.


If your business partner can’t communicate with you, it’s very likely that they will have other corporate communication issues.  Do they take a long time to respond to email, phone calls, do they give incomplete answers?  These are all strong signs that they are a poor communicator.  This could involve poor communication with clients, vendors, employees, or the community and could damage your company reputation.


If your partner has a different skill set than you, it certainly doesn’t mean you have found a bad business partner. You don’t need to have the same skills – in fact, it is better if you don’t have the same skills – but you must have about equal experience and skills that complement one another. Tenacity and working hard are great qualities, but they won’t be enough if your partner’s skills don’t complement yours. One person might do finance, and the other marketing. One person might be a “creative type” and the other an operations wizard. All of these can create a unique synergy that helps your business thrive and become talkably different.

Just beware that one person isn’t putting in a lot more work than the other or that one partner’s skills aren’t carrying the business and landing the majority of the clients. This can breed resentment and can also mean that both partners aren’t putting in the same effort.


A lack of work ethic is one of the worst bad qualities in a business partner. They don’t have to be a workaholic, but if you’re putting in 15-hour days while they sit on the golf course that could spell trouble. Or maybe your partner seems to work just as hard as you – but you’re still picking up the slack. Being busy isn’t the same as being productive and if you’re experiencing trouble in this area, it’s time to have a talk. If your partner can’t seem to increase their productivity, it might be time to say goodbye.  Again, another place that a strong business coach could help mitigate for you and your business partner.


No matter what the extent of the problem is, if you’re not working well with your business partner, it will negatively affect the success of your company. If you’re unable to find effective ways for how to deal with a bad business partner and fix the situation, it’s time to explore ways to get out.

Getting rid of a bad business partner can be a frustrating and time-consuming process. If you’ve thought ahead, you’d have an exit agreement laid out at the beginning of the partnership. Think of it as a prenup for businesses and specifies how either party can get out of the partnership. If you don’t have an exit agreement, getting rid of a bad business partner is a bit more difficult, but doable. No matter what method you choose, consult with an experienced consultant and business lawyer before you take any action. Here are some ideas on how to get rid of your business partner.


If you’re making good money, buying out your business partner can often be the best route. Your partner may walk away with a nice check, but in the long run, it will be best for the business. If you didn’t have a buyout plan in your initial partnership agreement, negotiations will be trickier and require a strong business lawyer. And if your partner doesn’t want to sell, you can flip the script and propose that they buy you out. Your only other option is to file a lawsuit, which is a long and expensive process with an uncertain outcome. If you really want to part ways with a bad business partner, you unfortunately may have to be the one to walk away.


Royalty deals are a great option for companies that have created a product. They’re sometimes written into the partnership agreement as an exit strategy for partners who provide the “creative genius” behind a product but aren’t interested in running the day-to-day operations. If your partner helped to create a product, but now seems to have checked out or isn’t interested in running the business, this isn’t necessarily one of the bad qualities in a business partner – it just means their business identity is likely that of the creative artist, not manager or entrepreneur. In this situation, royalty deals are typically a win-win.


Are you early in the start-up process? If so, how to get rid of your business partner could mean just walking away. If you haven’t started making money and don’t have a brand following or any products on the market, it’s easier to cut your losses now. This is also an option if you are in a very stressful position with a bad business partner and can’t find any other options. If your partner is going to run the business into the ground, consider getting out while you can. Starting a business involves some level of risk, so you can consider it a lesson learned and use it to make smarter decisions in your new venture.

Keep in mind that bad qualities in a business partner aren’t always obvious, but always trust your gut and use your head and not your heart.  You can like your business partner as a friend or individual, but in the end, the goal of any business is to make money.

If you need assistance figuring out if you have a bad partnership, or would just like to discuss next steps, MCDA CCG can help.  We offer entrepreneurs just like you advisory services with a teams of successful consultants that have traveled the path of multiple start-ups, and successful exits.  At MCDA CCG we can assist you with coaching, advisory, partnership agreements, exit agreements, and much more.

Call or reach out today for a free discussion.

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Startup Stock Option & Incentive Plans

Stakeholders: Their Impact on the Success of a Business

Leadership and Courage: Overcoming Fears

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