Small Business Disagreements: How to Handle Disputes

Small Business Disagreements: How to Handle Disputes

An Ounce of Prevention is Worth a Pound of Cure

While calling any disputes between you and your business partners “a disease” might be hyperbolic, the analogy still works. Small business disagreements can make life miserable for all involved, which negatively impacts profits. Setting up a framework to prevent disputes before they arise is not only easier for everyone involved, but less costly for your business, than trying to tackle them as they come along.

Select Your Partners Carefully

You will want to take great care when selecting who you go into business with. It isn’t enough that you laugh at each other’s jokes or root for the same sports team. They need to be people you can implicitly trust. They will also need to be people that won’t drive you up the wall when you’re working in close proximity with them for long stretches of time. No other factor, however, is as critical as finding partners who not only share your values and sense of morality (or in some cases, the lack thereof), but share a common vision for the company as well.

Create a Positive and Open Workplace

Fostering a positive workplace culture is an investment that pays off more than many business owners realize. If your partners (and employees, for that matter) feel like they can be open about any problems they encounter in the workplace, then those issues are less likely to snowball into a crippling dispute. Not only does this keep things from blowing out of proportion, it creates a healthy environment where compromise and open discussion are the norm.

Your Written Agreements

Chances are that your business’s founding documents – be they operating agreements, partnership agreements, bylaws, etc. – have some provision for handling disagreements in the workplace. If they don’t, amend them before it’s too late! These documents provide a framework for the responsibilities of each owner, how to accept new owners into the business, and how profits and debts are to be divided. It’s much harder for a disgruntled party to claim that you’ve violated procedure when you have it all in writing.

What to Do When Partners Clash

Let’s say that you did everything right and covered all of your bases, but you’ve still found yourself involved in a draining, drawn-out dispute with one of your partners. What should you do then?

Active Listening

Maybe you and your partner have grown resentful of one another. Or maybe your small business disagreement is about what direction the company should head in next. Consider a formal sit-down meeting where each party shares their perspective while the rest are compelled to listen. If everyone makes the effort to be mature and actively listen to what others have to say, it’s amazing what kind of compromises, agreements, and repaired relationships that it can lead to.

Mediation

However, if the parties come into conflict, consider calling in a neutral third party for some backup. This is known as mediation. The third party – your mediator – typically has experience in settling heated arguments, with many of them specializing in business disputes. Chances are they’ve handled situations far more intense than whatever you’re going through. It’s their job to know the best ways to facilitate understanding between conflicting forces.

The Worst-Case Scenario: Find an Attorney

Here comes the nuclear option for small business disagreements. Try to keep this one stowed away for real disasters, such as when when your company’s future is threatened. This is when you will want to bring in a business lawyer. Be warned that you might not be able to use your usual attorney for this if he or she has any conflicts of interest arising from their relationship with your partners or your business as a separate entity.

Looking to start a business or grow your current business? Contact FL Patel Law today by visiting our website or calling 727-279-5037.