Seven Signs of a bad business partner

Are you at the end of your rope with your business partner? How can you tell if the problem is fixable, or if you should just call it quits? It can be hard to recognize – and admit – that you have a bad business partner, but if you’re asking yourself these questions, it’s time to evaluate your situation.

Tony Robbins says, “The quality of a person’s life is most often a direct reflection of the expectations of their peer group,” and that applies to businesses, too. The quality of your decisions and the success of your business overall are deeply affected by who is on your team. A bad business partner can affect your success in all the wrong ways – and it’s not always obvious when your partner is bad for business.

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Signs of a bad business partner

Bad business partners come in all shapes and sizes, from complainers to reluctant communicators to outright liars. It’s not always that obvious, either. If you simply have different values but there are no concrete problems, it can be harder to recognize that you’re in a bad business relationship. Here are some of the most common signs of a bad business partner.

They’re not solution-oriented

If your business partner seems to always have a problem, but never a solution, that’s a bad sign. Everyone needs to vent from time to time – that’s a part of being human. But if that’s all your partner does, you may want to toss them a hint about the power of positive thinking. It is possible for them to change their mindset, if they are willing. If not, it’s time to consider alternatives.


They have financial “skeletons in the closet"

two business partners talking

We’ve all made some questionable financial decisions, and we’re not saying that anyone who has done this will be a bad business partner. But a long, poor credit history, previous bankruptcies or being banned from running a business are big red flags. Also, be aware of other projects they have their hands in currently – even successful ones will give you an idea of the type of business partner they will be.

You have different values

You don’t need to have the exact same values to have a good business partnership. In fact, different values and perspectives can be a good “yin and yang” to a partnership, as long as communication is open and clear. (In fact, sometimes differences can be your greatest asset, as in the case of these startup founders.) But there are two areas you should agree on: finances and the type of work you accept. If you find yourself fighting over things like expenses and bonuses, or if one person wants to accept a lot of pro-bono work while the other is totally focused on money, that can spell doom for your partnership. Shared vision is important, as is agreeing on how to achieve that vision.

woman dealing with bad business partner

They won’t sign a partnership agreement


Partnership agreements, as mentioned below, provide a roadmap for the partnership – good or bad. It maps out partners’ roles as the company grows and what happens when it becomes successful; it also maps out an exit strategy should the partnership go sour, helping you to answer the question of how to get rid of a bad business partner. If they won’t sign one, look elsewhere.

They don’t communicate

Lying and mood swings are obvious signs of a bad business partner. But even things like taking a long time to respond to emails or phone calls, not answering questions directly or giving incomplete answers are all signs that your partner isn’t a good communicator, which could spell doom for your business.


Your skills are unequal


You don’t need to have the same skills – in fact, you shouldn’t have the same skills – but you must have about equal experience and skills that complement one another. Tenacity and working hard are great qualities, but they won’t be enough if your partner’s skills don’t complement yours. One person might do finance, and the other marketing. One person might be a “creative type” and the other an operations wizard. Just beware that one person isn’t putting in a lot more work than the other.

You’re doing all the work

If your skills are balanced but your work ethic isn’t, that’s also a problem. Your business partner doesn’t have to be a workaholic, but if you’re putting in 15-hour days while they sit on the beach in Cancun, that could spell trouble. Or maybe your partner seems to work just as hard as you – but you’re still picking up the slack. Being busy isn’t the same as being productive, and if your partner can’t seem to increase their productivity, it might be time to say goodbye.


How to get rid of a bad business partner

You should have an exit agreement laid out at the beginning of the partnership. This is like a pre-nup for businesses. It will specify how either party can get out of the partnership. If you don’t have an exit agreement, getting rid of a bad business partner is more difficult – but it’s still doable. No matter what method you choose, consult with an experienced business lawyer.

Buy them out

If you’re making good money, buying out your bad business partner can be the best route. Your partner may walk away with a big chunk of change, but in the long run, it will be best for the business. If you didn’t have a buyout plan in your initial partnership agreement, negotiations may be tricky and require a lawyer. And if your partner doesn’t want to sell, you can propose that they buy you out. Your only other option is to file a lawsuit, which is a long and expensive process with an uncertain outcome. If you really want out, you may have to be the one to walk away.


Come up with a royalty agreement


Royalty deals are a great option for companies that have created a product. They’re sometimes written into the partnership agreement as an exit strategy for partners who provide the “creative genius” behind a product but aren’t interested in the day-to-day operations. If your partner helped to create a product, but now seems to have checked out or isn’t interested in running the business, royalty deals are typically a win-win situation.

Dissolve the partnership

Are you early in the start-up process? Consider just walking away from the business. If you haven’t started making money, and don’t have a brand following or any products on the market, it’s easier to cut your losses now. This is also an option if you are really in an untenable position with a bad business partner. If your partner is going to run the business into the ground, you might as well get out while you can. Consider it a lesson learned and choose more wisely next time.


The signs of a bad business partner aren’t always obvious, but remember to listen to your gut – and use your head, not your heart. You may like your business partner as a person and even as a friend, but in the end, the goal of any business is to make money. If you need help figuring out your next steps, Tony Robbins’ Business Owner Evaluation can help. Your business’ future is in your hands.


Ready to make changes to your business and gain financial freedom?

Learn the keys to successfully identifying a bad business partner with Tony Robbins’ 7 Forces of Business Mastery free content series.