Fire the Co-Founder Who’s Holding You Back

By Tina Cannon | September 7, 2010

You probably already know that sometimes you have to fire your customers. It turns out, when you’re starting a business, sometimes you have to fire your co-founder, too.

Of course, in a perfect world you’d have the perfect team from the start, but — and I speak from experience here — that rarely happens. Sometimes working relationships are not meant to be but you don’t know it until you’re in the thick of it. When that happens, your only option is to “fire fast.”

Here are the three lessons I’ve learned that can make these conversations less painful.

Lesson 1: It’s Not Personal

Four years ago, I was in the fourth month of a restaurant partnership and tension was thick. For starters, we were five women — that in itself should speak volumes on our ability, or lack there of, to come to a consensus on many issues. With literally too many cooks in the kitchen, we found that our venture was moving in a variety of different directions, which confused staff, and worse, customers.

Three of the partners approached me about our fifth partner, let’s call her Sally. She was a good soul, both hard working and dedicated. The problem was, she just was not on the same page as the rest of us businesswise. The rest of us were heavy into profit margins, cost of goods, growth, etc., while she seemed to enjoy the day to day. That’s not a bad way to be, but we could hire an employee to do that and not give them 20 percent of the business.

For me business is always business, it’s never personal. If you cannot be frank and honest with your partners, then you shouldn’t be partners in the first place. This is where so many owners fail because they go into business with friends or family and find it difficult to have the hard conversations.

Here are a few ways to make things less personal right from the get-go:

  • Clearly establish roles and responsibilities. Had we done a better job of clearly identifying our roles and goals of the endeavor, perhaps we never would have had five founders in the first place.
  • If you don’t have a lawyer, get one. Enough said.
  • Get a signed Operating Agreement in place — even if you don’t think you need one. This is especially important if you are going into business with friends or family. In our case, having an agreement in place made the details of our split much easier.

Lesson 2: Don’t Put Off the Decision

The faster you fire, the better. If you don’t believe me, just ask Rosilyn Parahis, CEO and founder of the online cosmetics sampling company Smackages. She fired her co-founder after the third week. Rosilyn quickly noticed that the co-founder did not have the same start-up drive and 24-hour schedule needed for most new companies.

“You don’t have the luxury of time,” she says. “The longer you wait to do what you know needs to be done, the worse it will become.”

Just because someone can perform the duties of the job doesn’t mean she’s a good fit. Startups are exciting but they have unique challenges that well-established companies don’t. And not everyone can handle the intense and uncertain environment.

Lesson 3: Be Frank

I called Sally and delivered the bad news. I explained that we loved having her around but her goals and the rest of the LLC just did not match up. Her presence was causing strife but ultimately it was hurting the business. We discussed that profit margins on her days were much lower than other days and her lack of overall knowledge forced other owners to work harder to pick up the slack. To my surprise, she took it much better than I had expected and agreed that she was in over her head. We are still friends today and better for it.

If your business is like mine, you can’t afford to waste time — or money. Remember, this isn’t about making friends, it’s about running a business. So buck up and fire the founder who’s holding you back.