It can be a tough time when one of the co-founders of a small business decides to leave. Here are 6 steps to help you get through without damaging the business.
With the number of new small businesses being formed in the UK growing every year, it’s inevitable that at some point many of these will see one of the founding members walk away – whether that’s to try their hand at something else, because they feel they can take their current business no further, or for other reasons.
And it can be a tough time for both the other founder and the business itself. These 6 steps will help you to get through to the other side with your business and reputation intact.
1. Do it quickly
If the co-founder has mentioned they want to leave, and are certain about it, then get the ball rolling sooner rather than later. Dragging out the process benefits no one and a quick break means less disruption for the business.
As soon as they agree they’re going, get the legal paperwork sorted (see below). And don’t forget to be honest with any staff and let them know what’s happening.
2. Check the paper work
Hopefully, when you set up the business you’ll have laid out what happens in a situation like this. If not, there might still be basic contracts and ownership documents that could help you take the next steps.
You need to find out legally who owns what in the company. This could be intellectual property, physical investment like equipment or liquid assets. See if you can work out if they’re owned anything or owe anything.
3. Make it as amicable as possible
Even with the right paperwork there will be a lot of grey areas that could become the focus of disputes. Try and avoid this – there’s no use making enemies especially with someone who will no doubt be a friend.
If problems do raise their head, try and be the bigger person to get it done with as little fuss as possible. The small business world is full of gossips – if you handle the break-up well you’ll make a good name for yourself.
But don’t get taken for a ride – if you’re certain you own the IP rights or something else of value, do stand your ground. There’s no use giving in if it means you’re left with a weakened business.
4. Get briefed
Once all the paperwork is done and you’ve agreed how and when they’ll leave, sit down with them and get a full briefing. You need to find out what they did in the company, any projects left unfinished, and their relationships with the various contacts and clients.
Get them to leave contact details for people you might not have dealt with, and make sure they send messages to them all explaining the situation.
5. Consider replacements
You might think you’ll go it alone now – but the chances are that your co-founder played a big role in not just setting up the company but also running it. Once you’ve had your briefing you’ll know what the co-founder brought to the table and what will be missing now they have left.
Consider hiring someone to replace them. This is why a briefing is so important as it’ll help you create a role and job description for the new person.
6. Make it final
This last step is important. As you’ll probably know by now, a co-founder leaving is a disruptive and difficult period. But once it’s done, you can move one. But only if you make the break up final.
It’s probably best not to give them the option to return as if they decide to leave again you’ll be faced with similar disruption. And you don’t want them coming back if you go on to make the business more successful, with them still claiming part ownership of it.
But do allow them social visits. After all, you still should be friends with them.