How to Avoid and Resolve Conflict with Your Business Partner


How to Avoid and Resolve Conflict with Your Business Partner

Starting a business with one or more partners can be an excellent way to combine resources and draw on the different strengths that each partner brings to the venture. As with any relationship that involves human beings, however, you must be prepared for the potential of conflict with a business partner. It may be inevitable, but that doesn’t mean it needs to ruin the business relationship or the relationship the partners had before they went into business together. Below are three tips for how to avoid this type of conflict and what you can do if it does come up.

Be Sure to Clearly Define the Role of Each Business Partner

Each person in the business partnership should have a good sense of his or her skills, strengths, and weaknesses. This information, along with the past work experience of each business partner, should determine the role each person plays in the new business. Assigning roles from the start can help the partners avoid wondering who is doing what later and experiencing conflict because of it.

It’s not realistic that each business partner will split duties equally. Assigning roles and responsibilities such as accounting, payroll, marketing, and hiring employees, ensures the completion of all tasks without overlap and without anyone dropping the ball. Don’t be afraid to visit the topic of division of duties again if conflict arises due to uncertainty.

Never Start a Business without a Written Agreement

You may want to consider visiting a business attorney and drawing up a partnership agreement before officially launching the business. In addition to outlining each person’s role and responsibilities, the document should contain the following at a minimum:

  • How much control each partner has with major decisions
  • Compensation and distribution of profits
  • How to handle additional capital contributions if it becomes necessary
  • Business procedures and a decision-making flowchart
  • The circumstances under which the business relationship between partners can terminate
  • Worst-case scenarios such as the death or serious illness of a partner

Once signed, keep in mind that the partnership agreement becomes a legally binding document. For this reason, make sure that each item includes as much description and direction as possible.

Confrontation Isn’t Always a Bad Thing

The worst business conflicts tend to occur when people don’t speak up about things that concern or bother them and then end up blowing up over something minor. It’s far better to confront a partner when the issue occurs and resolve it quickly than continue to work with unresolved conflict and potential resentment. There’s nothing wrong with speaking your mind or asking a partner to defend his or her decision. This shows that you’re personally invested in the success of the business, not that you just want to be right.

Schedule a Business Coaching or Planning Session

These are only three brief suggestions for dealing with conflict among business partners. However, several other situations are sure to arise. To get your business partnership off on the best possible footing, schedule a consultation to discuss conflict resolution with our small business consulting firm today.




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