How do you ‘break up’ with business partners that you have worked with for years without souring the connection?
While more than 80 per cent of senior executives feel partnerships are important to business growth, nearly half find it challenging to keep their partnerships mutually rewarding.
Your business may need to move in a different direction, cut costs or you may just not be getting the same value from your suppliers. You could have even found better business partners through leveraging big data and technology tools like the Powerlinx platform. Unfortunately, sometimes the only solution is to say goodbye to old suppliers.
Discover the power of new strategic partnerships by downloading our free ebook, Lessons from the top: Why business collaboration is vital to your business.
Here are five steps to amicably and easily end relationships with long-term business partners.
Check your contract
Hopefully you created a partnership agreement or contract at the beginning of your business relationship. A contract should cover particulars such as the duties and responsibilities of each individual, the partnership duration, renewal terms and a dissolution or exit strategy.
If there’s no written agreement in place, be prepared for a bit more of a battle. For example, a supplier might be frustrated when they are told their services are no longer needed. This could cause them to do drastic things like put a premium on any unfinished projects for your business – which are extra costs you don’t need.
In this instance, make sure you inspect all documents relevant to the partnership – this can include invoices, letters or emails. These documents can show written evidence of each party’s responsibilities.
Going over everything with a fine-tooth comb is essential to uncover your supplier’s obligations and whether they have met all their duties.
Breaking up is hard to do, but it can be made even more difficult if you give vague or disingenuous reasons for ending the partnership. If you have been working with a supplier for years on end, take the time to meet with them in person to discuss ending the relationship.
It may be that you need to seek more pitches in that supplier area to meet your due diligence, or perhaps your business is just moving in a direction where you do not need their services anymore.
Whatever your reason, give an honest and detailed explanation that leaves no questions unanswered for your supplier.
Stay professional with your business partners
Despite your best efforts to terminate the partnership amicably, your supplier may begin acting uncooperatively – along the lines of submitting work late, not returning calls or attempting to charge more for projects. If this happens, remain professional. Don’t get petty, and keep the lines of communication open.
Lastly, send the supplier a letter of thanks once the relationship winds up. Ensuring you have not burned any bridges will contribute to your company’s reputation as honest and professional.
Seek legal help
If you come up against a dispute with your business partners on dissolving the relationship, it may be necessary to hire attorneys to steer the process.
Keep your attorney in the loop on any details that you and your supplier agree to. As plans develop, ensure your attorney swiftly prepares any new or revised agreements and delivers them to your supplier and their attorney.
Learn from your mistakes
Once the legal process is complete, take a look at the partnership to examine where it went wrong. Where did communication break down and how did each party fail to meet expectations?
After you’ve identified the causes for relationship breakdown, leverage the tech tools and big data at your disposal to explore your current and potential business partners and check for any warning signs.
Big data can provide the insights to accurately analyze your business partners, and their strengths and weaknesses. It can also be an effective predictor of future success for prospective partnerships down the line. Compare the data and warning signs and ensure your future partnerships can make the cut.
To learn more about the business benefits of collaborating with the right business partners, download our free ebook, Lessons from the top: Why business collaboration is vital to your business.
And if you’re in the market for a new supplier or partner, take a look at Powerlinx’s online database of global companies.