business dispute

How to Handle a Business Dispute

by Josh Biggs in Business on 27th August 2019

Finally, it looks like things are going your way. After a herculean effort you’ve launched your software startup business with a few business partners. You’ve already set up a website, made a few sales calls, and signed up a few big accounts.

But, unfortunately, one of your clients turns out to be difficult. Things go from bad to worse until you’re involved in a business dispute. Your client refuses to pay your fees despite all the time, money, and effort you’ve sunk into the project.

What can you do to resolve the situation?

Two things: first assess the situation; then seek a resolution.


Assess the Situation

A strange quirk in human nature is the belief that our perspective is the only perspective.  We may carry this so far as to resist any facts to the contrary. Even if the other party has piles of evidence against you, you might still insist that you’re correct and have the right perspective.

While stubborn persistence in championing your narrative may make you feel much better, it can also spell disaster for your business. After all, you can only consider a business transaction successful if both parties believe it was a fair exchange of money for services rendered.

So, if you have a dispute with a client, you need to look beyond your own perspective and try to see the situation from their point of view too. You may be correct in believing that they have  shortchanged you after you delivered exactly what they asked for.

Conversely, you may have unintentionally misled your client in your marketing materials or sales pitch, leading them to feel that they received far less than you should have delivered. If this is the case, try to find the logic behind their reasoning so you can resolve the issue quickly.


Seek a Resolution

After your assessment of the situation, you will have a much better idea of what is going on. Cool logic will have replaced anger and frustration.

What should you do if you’ve talked the situation over with your client but have still not been able to resolve your differences, though? They stubbornly insist that you didn’t deliver what you promised even after you’ve explained exactly why their expectations were unrealistic.

Here are three possible outcomes:

  1. If you believe that they are simply trying to get away with using your services without paying for them, then hire a small business lawyer to help you get your money.
  2. If you believe that you may have made a mistake, then apologize to your client and try to correct your error.
  3. If it’s still possible to come to an agreement without filing a lawsuit, then you can hire a mediator to help provide a more balanced perspective.


Don’t Get Discouraged

It’s possible that your dispute will be resolved harmoniously if it was based it on a misunderstanding. In that case, you may continue working with the client or peacefully part ways.

Conversely, things may have gotten out of control and you feel your business reputation has now been tarnished and your finances ruined. Rather than quit, learn how to rebuild your business reputation and move on. It’s a mistake to allow a few early business setbacks to discourage you from continuing your business.

As a startup, a business dispute can be discouraging. It can cause you to doubt your vision and question your ability to run a business. But disputes are often an inevitable part of business and can arise between owners and employees or between businesses and clients.

When business mistakes and disputes occur, try to learn from them rather than take it as a sign that you have no idea how to run a business.

Categories: Business