5 Tactics for Avoiding Business Disputes
Click here for some simple but effective ways to avoid business disputes from harming your relationships.
Disputes can easily make promising business relationships turn sour. Here are some of the best ways to avoid them – or stop them from spiralling further.
1. Make decisions sooner rather than later
Time is one of the biggest pressures of all – even more so than money – and it can easily put a hefty strain on once-strong relationships. It’s never a good idea to leave a major decision to the last minute, and it’s a particularly bad idea to do so if there’s more than one person involved in the decision-making process.
With time pressure, a seemingly small disagreement can quickly snowball into a big, long-term dispute – particularly if things didn’t work out well.
The only way to avoid this is to leave plenty of time, and never find yourself running up against a time-crunch – or each other.
2. Document everything you can
A paper trail is one of the most underrated assets a business – or anyone – can have. While things may feel secure at the time, you never know when you’ll need to be able to fall back on a written agreement, or even just an informal agreement detailed through an email chain, for instance.
In other words, it will never hurt for you to keep all these documents to hand – but the opposite can be devastating for a business, and make resolving a dispute next to impossible. Things can turn into a case of ‘he said, she said’, which is not a good situation for a business to get into.
3. Cover your bases by creating clear shareholder agreements from the outset
Shareholder agreements are there to put everything in writing – to confirm that you are all on the exact same page with regard to your responsibilities, your rights, and how decisions about the business will be made.
This is an essential document and there is a monumental difference between a well thought through and clear shareholder’s agreement, and one which has been poorly drafted and is incapable of protecting your interests. Recognising those differences is incredibly difficult if you’re not an experienced solicitor.
Problems don’t always jump out straight away, either. It may be that you don’t run into a problem until you’re years down the line – but that problem could be devastating for you or the business.
There is so much more a corporate solicitor can do for your business, besides drafting your shareholder’s agreement. You can click here to find out more about the benefits they bring.
4. Respect your fiduciary duties
Whatever your duties or obligations to the business, and its shareholders, make sure that you never fall behind, or let those duties get buried beneath the pile of ‘day to day’ work that will no doubt accumulate on your desk.
These duties are there to benefit the company and its shareholders. The moment you start to let them slip, cracks can start to appear in once-strong foundations.
5. Communicate and be fair
Despite the fact that business relationships are very different to personal relationships, their success still comes down to the same two basic principles: be fair, and be as open as possible.
Without good communication, relationships can fray at the seams very quickly. Issues need to be brought out into the open, not left to grow worse under the table.
And, ultimately, it will always be easier to reach an agreeable conclusion to a dispute (or avoid disputes altogether) if you are able to treat everyone fairly and with respect.
It seems basic, but it is all too often overlooked in high-stakes business relationships.