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How to Begin and When Necessary Amicably End a Business Relationship

Written by: Marijo McCarthy

Article Overview: As a small business corporate lawyer, I see value in ending business relationships as amicably as they began, sometimes with compromise and always with the application of a pragmatic approach. The value of an amicable end can be measured in time, money and an on-going network of professional relationships.

How to Begin and When Necessary Amicably End a Business Relationship

As a small business corporate lawyer, I see value in ending business relationships as amicably as they began, sometimes with compromise and always with the application of a pragmatic approach. The value of an amicable end can be measured in time, money and an on-going network of professional relationships.

There are distinct phases -- beginning, ongoing and termination -- in any relationship between a small business owner and an outside professional retained to provide the business with needed services. Effective handling of these phases can mean the difference between a successful relationship and a rocky road from start to finish.

Consider this example and then let's take a look together at where things can go wrong -- or right, if handled properly:

Your business is doing well, chugging along with no major ups or downs. You have decided, however, that it has more potential and now is the time to pursue growth in double-digits. You decide to hire professional marketing assistance to expand the reach of your brand. After sorting through a few recommendations, you narrow the choice to a qualified marketing professional.

Now be certain to...

Establish rapport and clarify intentions. You and your consultant need to get comfortable with each other's working styles so that you can work productively together for the number of months required to accomplish the task. And, you need to be sure that you have carefully and specifically documented what will be required to achieve that task. (As you will see later, this is time and money well spent in this early stage.)

Monitor production, achieve milestones and make payments. Your consultant needs to produce, to your satisfaction, the marketing campaign you have approved. In turn, you need to pay, on the terms and conditions to which both of you agreed, for the production of those services.

Reach final goals and conclude the project.

So far, so good. But what do you do when, as sometimes occurs, you are not happy with the progression of the project? What happens when the chemistry is not there, or you end up disagreeing creatively on every milestone achieved, or agreed upon deadlines are not being met, or any one of a hundred other things occur which can take a project off track?

When this occurs, and assuming you have tried talking with the consultant and still gotten nowhere (no satisfaction, no change in approach, no improvement in meeting deadlines, etc.), you need to take clear steps to terminate the relationship. I offer two suggestions for doing so effectively:

Don't let the termination languish. Turn to your contract -- as promised earlier, there is value in the time and money spent on that document -- and let it determine the next step. The contract will tell you how to terminate, how much notice is required, what payment is required for you to do so. Follow the terms you both agreed upon when you entered into the relationship.

Be firm, but reasonable. If the consultant disagrees with the termination and is challenging the basis (because the contract involves a creative product, there may be some legitimate basis for the disagreement), you need to decide how much of your valuable time, money and relationships you want to spend resolving the disagreement.

As I counsel clients often, you want to approach the resolution with something less than a scorched-earth attitude... that may work well for the Marines, but leaves a very bitter taste on both sides in a business resolution. No business owner wants to be taken advantage of, but there is often a fine line between a reasonable compromise and undue advantage. The smart business owner gets that and ends a business relationship with honesty, fairness and the ability to move on without looking back. Hail reasonableness!

As Thomas Paine penned, "The harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value."

Today's small business owners don't need a revolution, just a recession, to value time, money and professional relationships.

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Article Tags: business relationships, compromise, corporate lawyer, pragmatic approach, professional relationships, small business, time money



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