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How to End a Business Partnership with a Friend in 5 Steps?

A business partnership is a way for both parties to benefit from the profits. However, there will be conflicts in the business process.

At this point, the partners will work together to find a solution. Ending the business partnership is necessary if things become too hard to handle.

So how do we end this type of partnership peacefully?? Here is our detailed guide on how to finish. It will help you a lot in your negotiation process.

4 Reasons Why Business Partnerships Fail

Any discord in any relationship has its reasons, and so does the discord in business cooperation. We’ve listed four causes of failed relationships in the section below.

Knowing these things can help you keep your professional connection intact or even recognize when it would be appropriate to cut ties with your partner.

1. Lack of Communication

One of the most common reasons for business breakdowns is a lack of communication. Good communication makes it easier for parties to connect and interact with other partners.

Business partners need to take the time to meet and resolve company issues, especially regarding ownership.

However, many businesses rarely organize meetings to disseminate and discuss work. Its consequence is a breakdown in business cooperation.

2. Lack of Transparency

Transparency is key

Before business cooperation, it is essential to have transparency. Partners need to interact with each other on data such as financial records and reports.

This way will help the parties understand and trust each other. In addition, you need to clearly define the rights and responsibilities of the parties so that they can be held accountable whenever problems arise.

Without transparency, the trust of the parties will decrease. This reason will make the business cooperation impossible to continue.

3. Different Visions

The essential to maintain cooperation between the parties is a common goal. In the beginning, when starting a partnership, partners will often set similar goals.

Yet, each person’s initial vision may change after a long time of jointly developing the business. They will find a way to accomplish their own goals.

At this point, the parties no longer cross the boat in the same direction. The result of this situation is a breakdown in business cooperation.

4. The disparity in Contribution

The disparity in contributions may affect your partnership.

Conflict occurs when someone contributes less than the rest. The person may contribute less in effort, time, or money.

This case makes the rest of the people unhappy and leads to quarrels. A total collapse may occur if the situation worsens and the partners cannot resolve it.

In addition, if one person finds that he contributes too much and the other does not, he will feel less committed to the business. This situation leads to a decrease in the contribution level and the business quality.

5 Steps to End a Business Partnership with Your Friend

A beautiful friendship does not necessarily bring a long-term commitment to business cooperation. When each partnership breaks down, what you need to do is to deal with it most reasonably and effectively. Here is our guide:

Step 1: Practice Honest Communication

The first thing you need to do when each business partnership breaks down is to communicate honestly. You and your friend need to sit down and work together to figure out what is going on.

Be clear about what you want from the breakup process to prevent misunderstandings. Tell your friend if keeping him is your top priority.

If the purpose is to make the most significant money possible from the firm, it should also be made clear.

Step 2: Willing to Compromise


If conflict leads to the downfall of a business partnership, you and your partner need to compromise to resolve the issue.

You need to state your requirements and wishes so that he can understand and vice versa. If the two parties cannot meet each other’s needs during the compromise process, you can invite a lawyer to act as a third party.

Lawyers can help you see and solve the problem most objectively.

Step 3: Seek the Help of Experts

Negotiating with partners is not always favorable. At this point, you need third-party help. This person should be an expert in the area of negotiation.

Also, remember that unbiased advice can be from someone who isn’t personally invested in the company, helping to prevent disputes. Avoid contacting an attorney; instead, think about speaking with a mediator, business coach.

The lawyer in the step above is also a suitable expert in this case. However, once you invite an attorney, your relationship may take a turn for the worse.

Step 4: Notify Everyone

Informing people

When the founders are no longer working with each other, the people involved in the business need to capture this information.

Informing people will help prepare them mentally for everything to come. If those people stay in the business because of your partnership, they will probably leave when you break up.

Therefore, it is essential to keep people in the company informed.

Step 5: Restructure Bank and Other Accounts

After you stop working together, you and your partner need to be clear about finances. Both need to synthesize and divide assets legally for mutual benefit. In this step, honesty is essential to keep your friendship.

The division of property needs to be legal and open to everyone. This process needs to happen quickly and clearly because money is a sensitive issue.

If there is a problem in the property division, it will lead to friendship discord.


Above is our guide on how to cancel a business partnership with a friend. Terminating a business partnership is difficult, especially with a friend.

However, when you cannot resolve the problems in communication, direction, and transparency, it is necessary to end the cooperation. To read more business tips and guides, visit our website! Thank you for reading!