Often successful business owners reach a point where they want to separate their interest in a business from the other owners with whom they started the business. Too many times, they discover that when they formed the business, not enough attention was paid to what happens when one of the founders wants to go a different direction.
It is easy for entrepreneurs to focus on the success they will achieve, and how they want to manage that success as they move forward. Optimism is at the core for every successful entrepreneur. However, it is essential that as optimistic entrepreneurs form businesses, they anticipate challenges that they may face in the future. By planning when the business is formed how one or more founders may leave the business, the business may avoid significant, potentially fatal, issues that may arise when a founder decides it is time to move on.
The time to set out what circumstances allow a founder to leave and provide clear guidance as to how departing founders are to be compensated is when everyone is excited about the future and agrees providing for and protecting success of the company is the goal. Once the company is successful, and one party wants to leave, the common perspective is lost, and the continued success of the business is a less central goal.
Accordingly, parties founding a business will be well served to plan not only for success, but for how the departure of some of the founders will be handled should that time come. If planning for potential departures is lost in the optimism of future successes, it is easy for a successful business to fail, or suffer significant setbacks, as the founders fight over how the success is to be handled when one wants to leave.