Starting a business with someone is sort of like getting married and having a baby in one fell swoop. Not only do you inextricably link your finances with theirs, but you also try to produce something valuable and lasting together. Unfortunately, as with parenting a child, you may eventually have very different ideas about what the future should look like for your joint creation.
If you have the ambition to continue taking your business to the next level or just generally feel like you have outgrown your business partner, it may be time to consider offering a buyout to assume sole control of the company. Purchasing the interest in the company previously held by your business partner can result in both of you feeling pleased with the outcome if you handle the process properly.
Keep everything professional and positive
If you start picking fights with your business partner now, they may lash out at you as the business sale process moves forward. Remaining on positive terms and keeping the focus on your professional ties, rather than any personal irritations that contributed to your desire to buy out your partner, will make the whole process simpler for both of you.
Much like in a successful divorce, a comprehensive post-mortem analysis of your business relationship may neither be possible nor positive for either of you. Instead of rehashing and reworking the past, you both want to focus on the future.
Make a strong first offer with some room to move
When you want to purchase the business, you can only offer as much as you can reasonably afford to pay. Whether the purchase funds come from your own savings and income or from financing provided through a bank, you need to know the maximum amount that you can offer and then make a reasonable offer below that amount.
Doing that will give you wiggle room when your partner inevitably counters your offer with one of their own. Starting with the maximum amount possible gives you nowhere to go, which could end negotiations quickly. On the other hand, starting too low can insult your partner and make the entire process more difficult.
Get a business valuation to make sure everything's fair and reasonable
Having a professional put a price on your business will make it easier for you to explain why you offered the amount that you do to your partner. From a comparison of the amount you initially each invested in the business to a projection of likely future profits, a business valuation for a partnership dissolution or sale will carefully consider the various specifics of your business arrangement. This ensures you offer an amount that is fair for your partner and reasonable for you.