A messy business failure can always be learned from. The Patricia Kluge bankruptcy has lessons for small business owners with partners, both known partners and unknown partners.
I once heard a wise man say, “Pick your business partners twice as carefully as you pick a spouse..because a spouse can only take half of what you have.”
If you are going into a partnership in a small business make sure you set up the proper buy/sell agreements so that you don’t wind up with a partner you don’t want. How could that happen?
You and you partner are 50/50 with no buy/sell agreements in place. You’ve known your partner since high school and trust him completely but….. after you two are in business he goes thru a divorce and his wife winds up being your 50/50 partner. Now what? But wait it could get worse…she remarries and now you have another partner, kind of. You get the picture.
Get your buy/sell agreements in order before you go into business with a partner. A good business attorney can help you avoid a terrible situation, one which we see way to often out in the real world. You’ll even find businesses for sale solely because of partnership issues that weren’t planned for at the beginning and now selling the business is the only way out.
Here’s a good video post regarding buy/sell agreements.