You get into business with someone you know you will get along with and see eye-to-eye on what is best for the business. In fact, wasn’t mutual understanding and like-mindedness the primary reason you decided to shake hands with your friend, bringing him or her into business with you?
Overtime, your collaboration as business partners suffered some highs and lows, but you were probably able to overcome the lows, but it is the bumps you need to watch out for. If you are unable to resolve a bump, it will turn into a mountain.
Climbing a mountain is tougher than going over a hill. When you and your partner are unable to agree on an issue plaguing the business, you need to work towards resolving the dispute before it de-escalates and fractures your partnership forever.
Partners should restrain their emotions when sitting down with each other to talk about the issue, causing a rift between them. However, having a conversation at work will only worsen the situation between both of you. At work, other issues and problems in combination with the dispute serve as a distraction.
You know what happens when you bring up other and unrelated issues in the discussion; it just makes everything worse than it already was. Instead, establish a separate time and venue to have a discussion regarding what is on your mind and on how both of you can reach a mutual resolution, benefitting both.
If the two of you are friends, talking over coffee or dinner may make you re-realize your dreams for the business, your friendship, and how both of you want to draw up a resolution to resolve the dispute. Remember; do not focus on the cause of the problem, but the solution to end it.
Before entering into business together, you and your partner must have signed a written agreement better known as the partnership/operating agreement, agreeing on the terms and conditions of the business. In the event a dispute arises, you can refer to the written agreement to assist you in resolving the dispute.
But, if this is your first time going into business together with someone, you need to know how to develop a business agreement. The written agreement needs to contain the following things:
In order to resolve a dispute, you can refer to the written agreement to find a resolution. Follow the procedure in the agreement to solve disagreements. Look at the agreement as the “Rule Book for Escalating Disputes amongst Partners.”
It is highly recommended to put all major decisions and actions taken by a business or agreed on between partners in paper. Seek the assistance of an attorney to draw up a partnership/operating agreement. The attorney will tailor the agreement to your business and to the different goals and interests of each partner.
If you are unable to come to a mutual decision, you need to bring in a third person to listen to both of your sides and help the partners develop a solution to resolve the dispute. The third person will act as a mediator with the sole purpose of encouraging the partners to address the issue in a non-confrontational manner.
Consult with a mediator with extensive experience in aiding partners to talk calmly without mixing in emotions and giving each partner the opportunity to express their opinions without the other partner interrupting them in between.
Mediators have dealt with several partners disputes in the past and they will use their knowledge from past disputes to suggest solutions and strategies to look past each other’s differences and come to a resolution.
On the other hand, a mediator knows when there is no solution to resolve an issue with exiting the partnership being the best and only option.
If the solution is amicable separation, consult with your attorney about the division and allocation of assets and other business-related items. If the relationship between the two of you has a hit sour note, so much so that you are unable to stand in the same room as them, you need to retain separate attorneys.
Your attorney will prevent your partner from stealing the business’s clients and stop them from damaging the reputation and image of the business. Additionally, the attorney will place roadblocks in your partner’s path by taking out a court injunction to prevent them from taking assets.
Do not wait till the last minute to hire an attorney, especially if you see the end in sight and know that there is no solution to resolve the dispute. Your attorney will tell you about you and your partner’s rights and obligations and on how you can keep your business and the written agreement.
Your attorney will inspect the written agreement to come up with ways you can still be at the helm of your business, minus the partnership. For instance, the agreement may state that you can buy out your partner. Whatever you do, do not take make decisions without consulting your attorney, as it you can face liability and litigation costs. Allow the attorney to provide you with options to terminate your partner and save your business following proper legal protocol.
You do not want to end a partnership without trying to solve it first. If you can resolve it using the strategies mentioned, that’s great. If not, try to part ways amicably.