When you started your business venture, you hoped that it’d be smooth sailing with success on the horizon. But as time wore on, you might’ve come face-to-face with unexpected challenges, even when dealing with those closest to you.
In a partnership, for example, you and your partners might find yourselves butting heads, which can lead to not only disharmony, but also the threat of business litigation.
But what are the top causes of partnership disputes? Let’s take a closer look.
The main reasons for partnership disputes
There are a lot of different ways that partnership disputes can arise. Here are some of the most common that you could face in your business:
- Differing goals: There may come a time when you and your partners disagree over the direction of the business. Some may want to focus on quality improvement while others might want to utilize the business’s resources to expand operations and market reach. These disagreements can lead to conflict over how to utilize the business’s resources.
- Uneven workloads: If the distribution of work amongst the partners is unfair, then you can see conflict. This can disrupt operations and even lead to sabotage.
- Financial disagreements: Managing money in your business can be a sticking point. This might involve disagreements over profit distribution, reinvestment in the business, determination of partner salaries, and decisions with tax implications. While these disputes can create strife among partners, they can also have a significant impact on your business’s financial health.
- Poor communication: Bad communication can cause a lot of issues in a business. It can lead to missed business opportunities and misunderstandings about key business decisions.
Several other issues can arise in your partnership, which is why you need to find effective ways to navigate them when they come up.
How can you avoid partnership disputes?
Fortunately, there are steps you can take to try to head off partnership disagreements. This includes doing each of the following:
- Having open and honest conversations with your partners early on about each of your visions for the business and how you want the business to operate.
- Discussing worst-case scenarios so that everyone has an understanding of how those situations will be handled if and when they arise.
- Keeping open lines of communication and continuing to talk even when disagreements arise.
- Commemorating responsibilities obligations, workloads, and pay in your partnership agreement.
- Creating a decision matrix that keeps the decision-making process fair and balanced.
- Seeking out mediation when conflict starts to brew.
- Negotiating buyout agreements that can be turned to if needed.
There may be other ways to avert a partnership dispute in your circumstances. You just have to find the strategy that works best for you and your business. But what’s key is being proactive and not just waiting for the problem to become so big that it’s unmanageable.
What if it’s too late to avoid a partnership dispute?
If you’re already facing an insurmountable partnership dispute, then you’re probably on the path to business litigation. While this can be incredibly stressful, it could give you the opportunity you need to resolve your issues favorably. But to achieve that outcome, you have to be prepared to fight to protect your interests.
To do so, gain a command of the facts and the law so that you can develop the persuasive legal arguments most likely to sway the judge or jury to your side. If you need more guidance on how to go about building your case, then please be sure to continue to educate yourself on these sorts of cases and the various strategies that you can implement.