Being in a business partnership comes with many advantages, from having a higher borrowing capacity to supporting each other. However, several factors can lead to partnership disputes, affecting a company’s intended growth.
For this reason, this guide discusses three ways to minimize such disputes.
Have a binding contract
You and your partner should have a binding contract that includes every aspect of the partnership. These include the roles and responsibilities of each party, scope of authority, capital contributions, profits and loss distribution, the leadership structure, decisions making processes, conflict resolution methods and procedures for exiting the partnership.
A well-crafted valid agreement can protect all parties. Besides, after signing the contract, each party should operate according to its terms. Failure to do so may constitute a breach of contract.
Discuss disputes when they occur
Disputes are common among business partners since most have different perspectives on approaching issues. However, a dispute may become harmful when it worsens. Thus, consider using conflict resolution methods when an issue arises.
Resolving disputes requires time – set aside adequate time, even after business hours, to have an in-depth conversation on the way forward.
Poor or lack of communication is one of the factors that contribute to partnership disputes. Thus, you should consider communicating with your partner effectively. You can opt to have a meeting either at the start or end of the day to update each other on individual scopes of authority.
Further, you should follow the set decision making process. Partners who make decisions without informing the other tend to be in disputes a lot.
Being in a dispute-free partnership is essential for business partners, but this is not always the case. Nonetheless, you can minimize and resolve disputes with practical tips. It will also help to get professional guidance to make informed decisions.