When to Cut Your Losses in a Relationship or Business Partnership

It is one of the toughest decisions you can make: a relationship with a loved one or business partnership with a trusted friend now feels harmful or draining. Everyday, you feel less excited or confident about the relationship's future. At what point do you cut your losses and end it? It is important not to end a relationship simply if there are small conflicts-it is equally important not to sever a business relationship only days or months before reaching profitability or a big breakthrough. At the same time, it is important not to sink more time, energy, or resources into an agreement that simply is not working-and is not likely to get better in the near future. Here are some things to consider before ending your relationship or agreement:

Does the good outweigh the bad? Every relationship is going to have some strife, some conflict, some overturned rocks that leave you wondering if everything is okay. Despite this, most of the time spent in your relationship should feel empowering or enriching in some way. If you are ALWAYS fighting or losing money, then it is time to reevaluate the partnership or relationship. Always is different from sometimes. And sometimes it takes a bit of conflict to build a deeper bond.

Are short-term circumstances impacting the relationship? Short-term and unexpected problems, such as the death of a business partner's loved one or unforeseen financial losses, could be the reason for his/her change in performance lately. Give it a few weeks to see if things blow over and improve. The same goes for a relationship: maybe she is stressed at work, worried about the recent economic uncertainty, or is preoccupied with a friend's poor health.

Are you communicating effectively? Believe it or not, you may be a part of the problem! Ask your business partner if there is anything else you could be doing to help him or her; sometimes resentment builds over time because a partner is too timid to ask you to do something she feels should have been done a long time ago.

If it's a business partnership, are there adequate incentives? If you have an "ownership stake" in the business and your partner has very little, where is his incentive to do great work? Make sure that everyone in your company-especially your partner-is in a position to profit greatly if the venture succeeds. Even a simple commission or affiliate structure (such as 10% of the proceeds on every new sale) could be enough to re-energize your partner and get him excited about the business again.

Remember to think it through before ending a business partnership or relationship. Make sure that you are not part of the problem, encourage your partner to voice his concerns, and swiftly lay out a plan for remedying whatever problems may arise.