How to break up with your business partner the right way 

Meredith Wood

Vice President at Fundera


Much like marriages, business partnerships require quite a bit of effort. You spend a lot of time finding the right person, defining the parameters of your relationship (financially, legally, and personally), and working together through communication and logistical challenges.

Unfortunately, the majority of these partnerships don’t last. Studies have shown that anywhere between 50% and 70% of partnerships ultimately fail, and the reasons for this are endless: unequal work shares, communication issues, hidden debts, etc. Maybe you even realized a couple years into your relationship that you didn’t need a partner in the first place.

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Anywhere between 50% and 70% of partnerships ultimately fail. Source:

There are numerous examples of famous partnerships that have soured. For example, Lockheed Martin and NASA tried to build a space orbiter in 1999 but failed because the teams couldn’t standardize the measurement systems that they were using. Starbucks and Kraft tried to distribute Starbucks in grocery stores. That partnership ultimately failed in the courtroom due to heated legal tensions.

Whatever the reason for the failure, it’s important to be prepared. That means there should be an exit agreement in place when you form a business partnership. (In the absence of exit agreements, many states call for a fair-share split of assets — a road that often leads to numerous legal troubles.)

If you’ve had enough of your business partner, you should follow a number of best practices. For example, starting with a “thank you” and establishing (and sticking to) deadlines both go a long way toward leaving amicably. Additionally, returning company items and disclosing your future plans (if you plan to compete with your partner in the future) help to avoid legal troubles down the road.

Fundera created a guide on how to prepare for and navigate difficult business partner breakups.


Meredith Wood is a vice president at Fundera. She is frequently sought out for her expertise in small business lending and frequently contributes to SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, and StartupNation.


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