When business partnerships work well, they can be a huge benefit to everybody involved. When business partners have a falling out, however, the end results can be disastrous both personally and professionally. A dispute between you and your business partner can permanently damage your relationship and be detrimental to the business as well.
That’s why it pays to be proactive about avoiding partnership disputes. Beyond having a solid operating agreement in place before you start, here are some tips that may help.
Never try to operate with equal power
A partnership that’s exactly 50/50 in all areas is inevitably going to lead to loggerheads when you and your partner disagree on something and neither of you will budge.
Your operating agreement should clearly state who has control over various aspects of the business (whether those areas of control are divided or one partner has the final say over all parts of the operation).
Plan for future squabbles
The agreement should also give the partner with less control options if they have a fundamental disagreement over a decision by the controlling partner. Even if you cannot imagine your relationship with your partner ever souring so badly that you’re not on speaking terms, imagine that it happens – and decide how you want the business dealings to proceed from there. Planning for the worst-case scenario doesn’t mean it will happen – but it does protect everybody.
Keep the lines of communication open
Good communication is the key to any relationship – including business partnerships. Have regular meetings with your partner where you reassess your shared values and goals and talk about the challenges and progress you see in the business.
Have a conflict resolution process in place in your partnership agreement, and make sure that your partnership meetings are always handled thoughtfully. As long as everybody feels comfortable sharing their thoughts without fear they’ll trigger explosive responses, you may be able to avoid real issues.
Experienced legal guidance can help you draft a partnership agreement that addresses these kinds of practical concerns and more.
