Businesses that last share common traits. For example, they have written ownership agreements with key terms; they are structured to prevent conflicts and disputes between co-owners; and they have planned for timely succession to manage next-generation expectations and prevent frustration. Absence of these key fundamentals will likely cause lack of alignment between owners, preventing financially sound companies from lasting.
The focus of this article is on family businesses and the squabbles that frequently lead to business breakups. By their nature, family businesses are inherently susceptible to business breakups. It is easy to hold non-family members at arm’s length and treat them solely as business partners. But when they gave birth to you, you live with them you spend Thanksgiving dinners with them or you are the godparents of each other’s children, the dynamics of the business relationship change. There is no longer the comfort that comes with a non-family business in which the participants can just walk away and cut all ties without consequence beyond the four walls of the brick-and-mortar business.