How mediation can help business partners sleep at night
Running a business is not easy. In fact, it’s extremely difficult and at times, incredibly stressful. If you’re a solo founder, then you have to make tough business decisions all by yourself, find the finances to support your business, be the face of the company and make HR decisions all alone too. Those who run their own business alone often dream about finding the ideal business partner who wants to take on all this stress with them, as it just seems so much better to have the support of someone else.
However, having business partners comes with its own issues. If you don’t all have the same visions for the company, there will be arguments about how things are done. After all, 80% of business partnerships fail. So why do people keep embarking on this lost cause?
We take a look at what can break down in a business partnership and how mediation can help resolve conflict between business partners.
Why is going into a business partnership so attractive?
If the majority of business partnerships fail, are you not better off going into business alone? Why do so many people insist on going into business with a friend or seeking out a business partner for an idea they have?
It’s because there are a whole host of benefits of having a business partner instead of going at it alone. These benefits include:
Combining your knowledge and expertise
“Two heads are better than one.”
This definitely applies here. Of course, “partners” in business doesn’t necessarily mean two, so multiple heads will definitely be better than one!
Having a business partner with complementary skills to you will mean that you’re equipped to handle more situations and accept more business opportunities. Also, having a partner who excels where you’re weak is fantastic for plugging holes in your business gaps.
More working capital
Money is always a struggle when running a business, but if you’re able to combine your start-up capital, you’ll be in a much better position than if you were doing it alone. With at least double the resources, it will mean you’re able to scale and grow a lot more quickly and perhaps attract potential investors.
More business opportunities
Having strategic business connections is essential in business and it is often difficult to get into some circles unless you know someone. By having business partners from different sectors, you will have an exponentially larger network and a way of getting connections in a variety of industries. This will lead to a lot more business opportunities.
It will also eliminate more opportunity costs – those instances where you’ve had to turn down opportunities due to the costs involved. With more economic resources between partners, you will be able to take on more of these opportunities.
One of the hardest things about running a business alone is that it is often quite lonely. When times are tough, you want someone to be able to talk to and perhaps vent your frustrations. But at the same time, if you achieve a goal, it’s good to celebrate that!
Having a business partner means you don’t have to go through the highs and the lows alone.
This will differ depending on whether you’re set up as a Limited Partnership or a Limited Company. However, in both scenarios, there are tax benefits on having a business partner. Just as there’s a benefit to having more cash go into the business, you will have the benefit of splitting the tax paid. In an LLP, the actual partnership does not pay tax, but the individuals do. It’s a good idea to speak to an accountant to find out the tax benefits of a partnership.
Running your own business often means having no social life and it’s very easy to blur the lines between work and home life. However, with business partners, you can share the workload and therefore, taking time off won’t be as detrimental to the business as it would be if you were the only founder.
Conflicts between business partners
While there are indeed a ton of benefits to having a business partner, there are often many ways that a business partnership can go wrong. Here are just a few examples of typical disputes we see between business partners:
- Values: each partner has different business goals and ways of doing business. Some debate may come down to ethics, but some could be as straightforward as how to handle the finances or the business strategy implemented.
- Job roles: even though the owners of a company are not necessarily employees, they will take on job roles. If these are not clearly defined, then it will cause conflicts between business partners when they are not sure which tasks are whose responsibility.
- Benefits: business partners should be getting an equal share in the company’s profits and perks. However, sometimes there can be an unequal distribution, or one partner feels they’ve put in more work than the others and therefore deserves more benefits.
- Dominance: if one partner is more dominant than the others, this can cause a conflict. Perhaps they consider their ideas superior, or don’t show respect to the others. It makes for a hostile work environment.
Why use mediation to help business partners
The absolute essential ingredient for a successful business partnership is trust. Without trust, it’s not going to work. You cannot have partners second guessing each other or going behind each other’s back. Therefore, the relationship between business partners needs to be strong if you are going to work hundreds of hours a month together and try to run a successful business.
Business mediators are not just great listeners with amazing people skills, but they also have plenty of expertise that they can bring to the table to create an environment where common ground can be found between the disputing parties. Here are just some of the ways that a mediator can help your business partnership:
Mediators can help to challenge and review the situation
If you are disagreeing on a situation with a business partner and cannot come to mutual resolution, a business mediator can help you to review and reflect the opinion of the partner you are in dispute with and that may help bring another perspective to the table. This allows the partners to see things from another point of view and realise that their way may not necessarily be the best solution.
Mediators can facilitate communication
Sometimes it’s really difficult to talk about certain topics with your business partner directly, for fear of their reaction or the relationship turning sour. With a mediator, discussions are facilitated through the mediator who establishes ground rules and enables constructive focused conversation in a calm and professional manner.
Mediators can assist to help you identify what you require and need to resolve the dispute
Most business partnerships that go wrong are because they do not have an understanding of what they need or have an agreement in place when disputes occur. Things need to be documented officially with a clear picture of what tasks each business partner is responsible for. This allows for full accountability and procedures to be put in place should unfortunate scenarios occur. A mediation settlement agreement can be drafted by the parties lawyers to capture the agreements between the parties that were discussed during the mediation.
Mediators can be a business helping hand
A lot of mediators may just come in to resolve one problem and leave. But some mediators offer a follow up service to review the situation and ensure that they’re supportive throughout your business partnership. They can act as a business support person if further changes need to be made or have not worked that were agreed in the original mediation.
Who Are We?
Minute Mediation is a Mediation and Conflict Management Consultancy, providing mediation and conflict management solutions to businesses internationally. We continue to support clients in person or with minimal disruption with the use of tele-conferencing technology such as Skype and Zoom, whilst saving you time and money compared to a traditional dispute resolution service.
We focus only on commercial matters, ensuring that our expertise is focused and up to date at all times. The pandemic has impacted businesses across the world, but Minute Mediation are prepared to stand alongside our clients to ensure our Mediation and Conflict management solutions are managed efficiently and effectively.
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