5 Ways to Avoid and Resolve Business Partnership Issues

by Josh Biggs in Business on 15th June 2022

No one wants to think about partnerships ending in a business dispute, much less the end of the business altogether. However, if you do not put proper structures and processes in place for your partnership, the chances of that happening are greater than you might like. At some point in their careers, most small business owners will find themselves involved in a partnership with another person or group of people. It is essential that you protect yourself from potential setbacks by taking proactive steps to ensure success from the very beginning. By planning out all possible situations and preparing for them, you will be able to make decisions quickly and efficiently while keeping your relationship with your partner intact and thriving.

  1. Put the Business First

It’s important to remember that you’re working with a team, so it’s not about you or your personal interests. Try to focus on what’s best for the company and its future growth, rather than focusing solely on your own goals or even those of another partner. This will help you make better decisions when disagreements arise and it’ll be easier for everyone to get along!

  1. Use a Lawyers and Accountants

When you are starting a new business, it is important to work with an attorney or a commercial litigation lawyer who can draft a partnership agreement. A good partnership agreement should include:

  • What each partner will be responsible for
  • How the profits and losses will be distributed among partners
  • How decisions will be made regarding investment, management and hiring/firing of employees

In addition, having an accountant on your team can help you avoid many of the financial pitfalls that come when starting a business. The accountant can review your financial plan to ensure that it is realistic given all factors including:

  1. Document and Sign Everything

The best way to avoid any partnership issue is to have a written contract. This document should include all of the terms and conditions of the partnership, including how partners will be compensated, how profits will be distributed, how disputes will be settled and what happens if one partner wants out.

The contract should state whether it is an exclusive or non-exclusive business relationship—in other words, did you agree that only you could use this idea? Or could your partner also use it? The contract may also spell out how long each side has exclusive rights over their respective contributions.

It is essential that both parties sign this agreement before they start working together on any projects; otherwise, one party can claim ownership over ideas developed by both partners during the course of their time together.

  1. Have Open Communication Lines

The first step in resolving issues is to have open lines of communication. If you can’t talk about the issue due to personality conflicts or a lack of trust, then it will only get worse.

Talking about issues as they arise tends to be the healthiest way for partners to handle problems in their business relationships. It’s also important not to let disagreements escalate into fights or arguments; if one partner feels backed into a corner by another partner, this can lead them to feel like they have no choice but to quit the partnership altogether.

  1. All Decisions Should Be Made Together
  • All decisions should be made together. In the early stages of your business relationship, there are many things to consider, such as what you want to do with your company name and how to structure it. The best way to avoid any future issues is for all parties involved in a business partnership to make important decisions together rather than unilaterally.
  • Both parties must be on board with any major changes or additions they intend on making internally or externally. For example, if one partner wants their company logo changed but the other does not agree with this change then there would likely be an argument over it which could lead them to have different views as time goes by which causes friction when trying to solve problems later down the line

If you have made it this far, then you are well on your way to avoiding some of the most common issues that arise in business partnerships. By taking a collaborative and communicative approach to every decision and sticking to the business at hand, you will be well-positioned to resolve almost any issue that may arise. That said, we should always expect the unexpected when dealing with other people, so be prepared and flexible enough to handle whatever comes your way!

Categories: Business