Going into business with a like-minded partner presents many lucrative opportunities. However, two individuals with strong leadership skills will eventually have conflicting opinions on how a business should operate.
The partnership agreement that you draft upon founding your business will be a key element in your dispute resolution strategy. Once you understand how to use your agreement to prevent or quickly solve disputes, you can confidently resume business as usual.
Providing accurate role descriptions
Disputes often arise when one partner oversteps the boundaries of their role within the company. Your partnership agreement should clearly define each individual’s duties, rights and responsibilities. By referring to the terms of your agreement and acting in good faith to uphold it, both co-owners will act to mitigate the risk of disputes which might stem from such misunderstandings.
Providing pre-defined dispute resolution processes
If an unavoidable dispute does eventually occur, you can refer to the dispute resolution processes given in your partnership agreement. For example, your agreement might state that disputes should first undergo court-administered case mediation. You should also include provisions for an amicable exit or dissolution of the partnership in the event that a dispute can not reach a peaceful resolution.
Business disputes are a harsh reality that all entrepreneurs must accept. You can at least prepare for a potential conflict by writing a well-planned partnership agreement that accounts for unforeseen circumstances. The most important thing in business is to never burn bridges that could benefit you later, so your contracts should always pave the way for as many peaceful outcomes as possible.