3 Ways To Handle Dispute Between Business Partners

Nobody goes into a relationship with the hope of having a dispute someday.

But it happens and the best anyone can do is prepare for it.

Starting a business with a partner has so many benefits, but it also has its peculiar disadvantages.

One of which is – Conflict between partners.

You have seen or heard of it at least a few times, where a disagreement between co-owners threatens the existence of the business they have toiled to build.

Of course, not every conflict ends in the demise of the business. Some, if well managed, can make the business stronger as a result.

Here are 3 ways you can handle disputes with your business partner.

Three (3) Ways To Handle Dispute Between Business Partners

1. Prepare In Advance

The best way to tackle a dispute is to resolve it before it happens.

Because it is often too late to do anything right when everyone’s emotions are high, and reason has been thrown out the door.

There are two ways to resolve conflict in advance:

• The first is to start a business with the right partner: There are many factors to consider in choosing the right partner for you and your business. Top among them is the value they bring and their relationship with you. The right business partner should be someone you have an aligned vision and goal with, preferably, someone you have a relationship with before the business; hence you can trust them, have a conversation outside of business with them, etc.

• The second way is to form a partnership agreement: You have to draft a document that guides you and your partner on the next steps in the event of a dispute. Such an agreement typically consists of clearly defined roles, contributions and rewards (profit sharing) of partners. As well as how they can reach a consensus on key business issues, and worse case scenarios (such as the death or exit of a partner). Written agreements are more effective than when they are not. And it is recommended that every item of the agreement be written in a detailed and clear manner.

2. Communicate

One of the prominent causes of dispute between business partners is miscommunication.

Even in cases where disputes were caused by greed, resentment, external influences, and the likes, communication is a critical tool in handling disputes.

Instead of shouting and blaming each other, partners must seek to have a conversation.

For such a meeting to be meaningful, partners must make the effort to listen to the other party with an open mind.

Seeking avenues for compromise, and agreement.

And when they speak, they should speak to seek solutions instead of assigning blames.

We have found that simple communication can resolve a good number of disputes between partners but because it requires a considerable amount of effort to work, it is often not tried.

3. Ask For Outside Help

Sometimes it is wise to seek outside assistance in the resolution of the dispute between you and your partner(s).

This is often advised you seek outside help after you have attempted to handle it via your written agreements or communication.

Seeking the help of a professional dispute resolution expert like a mediator or an authority figure both parties respect is another way to handle a dispute between business partners.

As I earlier stated, business partnership disputes can be dangerous, but they can also strengthen the business when they are properly managed.

If your business lacks a proper system for handling disputes, this is a good time to implement these techniques for conflict resolution.

The fate of your business might just depend on the steps you take next.

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