How to Settle Disputes Between Business Partners
Everything has its ups and downs, and so does business. Relations between business partners might be great and this result in positive effects for the business. On the contrary, changes in the sentiments of partners can often lead to disputes, and this is the reason most businesses suffer. Well, now the question arises of how to settle disputes between business partners. There are certain things to follow if you want to resolve a dispute and make the business run smoothly as it was.
How to settle disputes between business partners
To be honest, things are unpredictable. We do not know what the future holds for us. An established business might face a huge loss, or a close friendship might turn into bitterness and vice versa. Especially if it hinders the growth and development of business, then these are the steps which you should follow:
–Know Your agreement
A legal document is of great use during a period of dispute. In terms of business, if you have a formal agreement with another party, like a partnership or shareholder agreement, then it is important to review especially in times of dispute. Focus on the section that mentions the claws to deal with issues. This would be helpful in resolving the issues by suggesting a way out.
It is essential to have an agreement with your business partner. If you do not have a legal one, then there should be some kind of informal agreement of partnership or any other in the beginning. The informal form may include email or any form of correspondence like text or notes. These should be considered in order to handle disputes.
-Identify the issues
The best way to identify disputes is by focusing on the issues that are hindering the workflow. It is tough to decide when emotion takes part. However, analyzing whether the issues are related to misunderstanding or facts is indispensable. It is important to talk out the misunderstandings with your partner.
Some common problems for business disputes are:
- There are differences in vision and priorities for the company.
- There is an unequal investment and share of profit among the business partners.
- There is an unequal distribution of work.
- Contradictory management rules among the business partners.
Just having an argument with your business partner is meaningless. You should know the realistic outcome of the dispute. However, the primary focus should be the priorities and goals of the business. A dispute is unexpected to resolve if there is a priority clash between you and your partner.
–Communication is the key:
After identifying the issues, it is important to discuss the matter. Communication is the key to solving any misunderstanding. You can get the best result by placing your emotions far apart. It is critical to talk it out. You should be clear about the goals and priorities and together be on the same page before resolving the issues.
If it is difficult to resolve the issues through meetings, then try to keep written records. A formal document to your business partner will not only highlight the effort to resolve an issue but also include suggestions for betterment. It is also important to set a timeline for the response and follow certain rules regarding such matters.
–Seek outside help
A third-party involvement would provide an unbiased opinion that can resolve a dispute. The work is similar to that of a marriage counselor. The involvement of an advisor can save a business partnership, thereby saving the future of the business. Similarly, a mediator is trained to handle disputes of some magnitude. Furthermore, BGES.Co can suggest a number of ways to help owners in solving business disputes.
On the other hand, you can also involve a lawyer if the matter cannot be resolved. A lawyer would provide legal advice on the matter and try to solve it without involving the court. This would help you to identify your rights and obligation in the matter. These steps are an answer to the question of how to settle disputes between business partners. A scenario can occur when you have taken all such steps but cannot resolve the issue. In such cases, if you and your partner decide to dissolve the partnership, then you should look out for an agreement. This would help to decide whether to sell out your business to a third party, or one of you would buy the whole share of the business.
If you are looking for expert opinion to handle business disputes, contact Business Growth and Exit Specialist(BGES) today. We are the best business advisory firm in Sydney. Our team of professionals will guide you through your business journey with the best possible solutions and outcomes.
