Business Partnership Conflicts – How to Avoid Them, and What to Do if They Happen

Most business partners seal the deal on their relationship with high hopes for mutual success. Even the most promising alliances, however, can fall victim to disputes over finances, workloads, or priorities. If you or your company are contemplating or committed to a business partnership, it’s worth considering how you might avoid certain conflicts, and what to do if they happen.

3 Common business partnership conflicts

Whether you’re teaming up with another cofounder, or an outside organization, business partnerships have a lot to offer in terms of growth potential.

  • They allow you to leverage shared knowledge, skills, and resources
  • They provide personal connection and support
  • They can help your business benefit from established processes, clients, or brand equity

Like most relationships, navigating a business partnership can be challenging. Statistics have suggested, in fact, that as many as 70% of business partnerships fail.

With that in mind, let’s take a look at 3 of the most common causes of conflict, and some steps you can take to avoid or resolve them.

1. Money

Money lies at the heart of many partnership disagreements – but it can be particularly problematic when friends or relatives go into business together. No matter who you’re partnering with and how much you trust them, setting the financial side of your arrangement down in writing is a must.

As a minimum, your incorporation documents or general partnership agreement should spell out:

  • Who’s bringing what to the business in terms of capital or assets
  • How you’ll share income and profits
  • What you’ll do financially if one partner wants or needs to leave the business

If you’re already bumping heads over money, it may help to sit down with your accountant or lawyer and discuss matters with an informed, but impartial, third party.

2. Responsibility

A disproportionate sense of responsibility is another common area of partnership conflict. If one party feels they’re contributing more than their fair share in terms of time or effort, resentment can build and clashes can happen.

The best way to avoid disputes over duties is by:

  • Doing your lean business planning together
  • Discussing how workloads will be shared in advance
  • Documenting what you’ve agreed to in terms of individual roles and responsibilities

If you’re regularly at odds with one another, try carving out time to discuss your concerns. Many sweat equity issues turn out to be a matter of perspective, and can be resolved through active listening and clear, consistent communication.

If your conversations just aren’t productive, it may be time enlist the help of a counselor who specializes in business relationships.

3. Control

Control issues erupt in many business alliances. Even if you and your partner are on the same page about company vision, values, and goals, you won’t always agree on how to execute your mission.

Evaluating your fit with any potential business partner is crucial. Make sure you:

  • Discuss your accountability to one another
  • Acknowledge that neither of you can realistically have full control over any one area
  • Gauge your mutual ability to make smart business decisions, knowing you won’t always agree

To sort out existing power struggles, start by recognizing that your disputes could be doing both of you harm in terms of their negative impact on employee morale, operational growth, or business reputation. Then do your best to meet regularly outside office hours in an effort to keep your partnership solution-focused.

If you really can’t settle your differences at any point as business partners, hiring a mediator or arbitrator may be your best course of action.

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