Mike Andes explains practical steps and agreement terms to handle the end of a business partnership (examples include divorce or a partner choosing to leave). He emphasizes pre-negotiating buyout terms (a "prenup" for the business), valuation methods (three independent valuators or profit/asset-based approaches), and documenting these provisions in operating/LLC agreements so partners can fully commit without fearing future unfair outcomes.
Chapters
Okay, you're getting divorced. Like, we never want that. We don't want to think about it. But, like, you're doing that now. 25% of the business is in jeopardy. What's supposed to happen? Oh, we're supposed to liquidate. I have to be bought out. And here's the valuation. Okay, we're going to get three independent valuators, and the average of those what we use. Some people use profit. And, like, we add the assets, like, in 10 years, one of you want to grow, one of you won't, like, cash out. Yeah, right. And having the conversation now when things are good and it's not a bunch of money on the line is really healthy. And then there's always the agreement of, like, okay, we know what the value of the business is, and if I ever want to buy them out or I need to leave, I know what I'm going to be getting out of this. You can just keep adding to it in your LLC as the business changes. It's going to take one evening for you guys to go over, like, what is the prenup of this business? How does that work so we both can, like, pour 100% into it, knowing that if and when things happen, like, I'm not going to get screwed again, because that's in the back of both of your heads.
