5 tips for preventing partnership disputes

On Behalf of | Jan 14, 2021 | Business Formation

You went into business with your partner because you had a shared vision for your company, and both had something to contribute to make that vision a reality. Even the best partnerships hit bumps in the road, though. In order to keep your business running smoothly, focus on preventing problems between you and your partner before they start. Below are five tips to avoid disputes.

Keep the communication lines open

Make sure you are both on the same page regarding your company’s goals, mission, management philosophy and brand development. After the business is up and running, continue to discuss issues as they come up, before they can turn into problems.

Work from a signed agreement

Investing in a new business enterprise is a high-stakes decision and you should not take it lightly. Make sure you have a well-written agreement drafted by an experienced attorney before you put your money on the line. Your agreement needs to define your ownership interests, methods for making decisions and even how the partnership might end, among many other things.

Define your roles

You both need clearly defines areas of responsibility and authority over the company and you need to respect those boundaries. Stepping on each other’s toes will only set you up for conflict. If you do not trust your partner to run their area of the business, you may need to rethink the partnership.

Discuss worst-case scenarios

Your written agreement should consider that things may not work out as planned. You and your partner need to discuss how you want to deal with those situations. These can be difficult conversations, but they are necessary. You do not want to find yourselves mid-crisis without a plan in place.

Identify issues early

If you see trouble brewing, address it as early as possible. Do not let disagreements fester. Rather than disappearing, they only tend to get worse or blow up at a later date. Discuss the issue directly with your partner, focusing on possible solutions rather than the problem. Bring in a professional mediator if you need to and rely on your written agreement to guide your actions.

A good partnership can be the basis of a solid, successful business. Hopefully, these tips will help you keep your partnership running smoothly long into the future.