You went into business with a close friend or family member — and now the challenges of building a profitable company are turning your relationship inside out. One of you wants to invest in a new oven for your cafe, while the other wants to put your profits toward opening a new location. How do you come up with a decision that makes you both happy? Here are a few strategies for handling business disputes with your partner.
- Talk it out in a formal meeting. Having a professional conversation in a conference room can help prevent emotions from taking over. Both you and your partner should come prepared to state your cases, with evidence (perhaps even PowerPoint presentations) to back up your assertions. If you have additional partners, a board of directors, or business advisers, ask them to sit in on the meeting and offer feedback after you and your partner have shared your points of view.
- Look for opportunities to compromise. In some cases, neither you nor your partner may get exactly what you want, but you can come close. For instance, instead of buying the $10,000 oven, would your partner be satisfied with a $6,000 model that performs nearly all of the same functions? Would you be willing to hold off on opening a new location now and work on a plan to purchase another space within three years? Consider what’s best for your business — and make decisions that will strengthen the company in the long run.
- If you can’t resolve the problem on your own, seek outside help. Look at the Association for Conflict Resolution’s online directory to find a certified mediator in your area. A professional mediator can work with you and your partner to resolve your differences and to help you create a game plan for your business. Mediation fees typically average between $100 and $400 per hour, depending on the complexity of the situation and the number of people involved, but the mediator’s work is generally complete within several days. If mediation is unsuccessful, you may want to seek legal counsel. A lawyer can review the details of your partnership and protect your interests should the dispute end up in court.
- Know when to part ways. Hopefully, when you launched your business, you and your partner also discussed potential exit strategies in the event that one of you no longer wanted to be a part of the company. If not, consult a lawyer who can help you figure out how to split up the business. Talk openly with your partner about whether you both see the business going in the same direction, or whether one of you should consider starting a spinoff company or leaving the business altogether. If you have similar goals for the company’s long-term future, you may be able to keep things on track. If it’s clear to each of you that the current dispute represents a fundamental difference in opinion, it may be time to say goodbye.