A partnership dispute can disrupt all parts of your business. Not taking preventative measures could mean the end of your partnership or difficulties in continuing to run your business until you can manage to resolve them. That’s why it’s so important to take steps to prevent a partnership dispute before it happens.
Many times, partners run into issues when they haven’t fully worked through their roles or determined what to do when they disagree on the way the business should progress. Fortunately, there are some different things you can do to reduce the risk of a disagreement or problem in the first place. To help make things easier for you, here are three ideas for preventing a partnership, so you can minimize the risk of a dispute in the future.
- Choose your partner carefully
It may seem fun to have partnership with a friend or family member, but what you should really look for in a business partner is someone who has complementary skills. For example, if they have skills in marketing, it would be great to bring them on to help promote services that you’ve built up.
- Write up a partnership agreement
The first thing to do is to talk to your business attorney and have a partnership agreement drawn up. You and your partner-to-be should discuss your visions for the company and how you feel you should handle disputes or issues that arise. Make sure your agreement talks about what is expected of each of you and does go over how to end the partnership if necessary.
- Talk about the worst possible scenarios
Finally, talk about the worst situations and disputes you think you could get into, and figure out how you’d get past them. Addressing issues in advance will allow you the opportunity to attempt to minimize them in the future.
You can even come up with a kind of playbook that discusses possible issues and the resolutions you’ll go with if they come up. You may also include an arbitration agreement or an agreement to attend mediation if you can’t resolve a problem after a short time.