Forming and growing a business requires a tremendous amount of dedicated time, effort and money. In most cases, collaboration with others is necessary for success.
Regardless of the agreements, contracts and potential personal relationships present at the beginning of a business partnership, disputes often surface. Sometimes communication solves the problem and allows for a company to forge ahead without disruption, whereas other cases end up in court.
A partnership gone awry could steal an entrepreneur’s focus away from bringing a new product to market or expanding globally. However, a general awareness of the common sources of conflict may help mitigate contention.
Three common reasons for partnership disputes
As with any relationship, troubles can factor into a partnership. Disagreements arise, priorities change, and individuals may be pulled in different directions.
Whether a result of poor decision-making, putting one’s interests before that of the company or a lack of communication, many partnerships fail. Despite the complexities involved, human nature is what it is, and disputes are often the result of:
- Emotional involvement. Going into business with a family member, for example, can exacerbate tension in both personal and professional relationships. Challenges that arise in one area of life tend to overflow, having a detrimental effect on the other. Meanwhile, depending on the situation, trying to protect a partner out of loyalty could be an entity’s demise.
- Disagreements about the future. It’s typically difficult for two or more people to agree about what success looks like. Meanwhile, as individuals change over time, other opportunities can easily pull partners in different directions.
- Unequal contributions. New projects, by nature, incite high energy, with work ethic in tow. As individual responsibilities shift, so can interest. It’s probably fair to say nobody wants to earn the same amount of money as someone who’s not influencing progress.
No matter why disputes arise, an inability to resolve conflict can necessitate extensive, costly litigation in search of a settlement. Although differences of opinion are inevitable, knowing the common areas of contention could help entrepreneurs establish comprehensive agreements that can stand the test of time.