A dispute between you and a co-owner or co-founder can ruin your company. It can derail everything you have worked so hard for. It can even end your friendship. This is something you must take seriously, no matter how unlikely it seems.
After all, no one thinks a dispute is likely in the early days. The company is young, you’re both excited, and it seems like the sky is the limit. Over time, though, things change. Relationships fray. Arguments blossom. Eventually, you may run into a dispute so big that you cannot get around it, and the company dissolves.
To help you avoid this, watch out for these four reasons disputes happen:
1. Your partner is your spouse, and marital disagreements impact the company.
Working together seemed natural at first, when the marriage felt strong, but now problems at home make their way into work. The fight you had about money and your personal budget turns into a fight about the company’s expenses. Tempers that flared at home are still hot when you arrive at work, so you work against each other instead of with one another. In the worst cases, your marriage heads for divorce and it takes the company down with it.
2. The business is not successful.
You both felt great about your business plan when it was all on paper, but now it’s not working. You haven’t hit your monthly projections in a year. The company slowly loses money every day. This lack of success causes stress and you begin arguing about how to fix it. When you both fixate on different ideas, knowing what is at stake, the dispute leaves you at a standstill.
3. You do not have the same level of commitment.
This is your dream. You quit your career to start this company. Your partner, though, just sees it as a fun side project. While you come in for 80 hours per week, your partner is just there for 20 hours on the side, with a “regular” job paying the bills. You both resent each other — you wish your partner committed more time, while your partner wishes he or she had more influence over the company.
4. You have very different personalities.
You want to take risks. You live rather recklessly, banking everything on a hunch. Your partner is very careful and conservative. As a result, you can never agree on what actions to take. You feel like your partner misses opportunities to grow, while your partner thinks you put the company at risk on a daily basis.
Business partner disputes put the company in jeopardy. Everyone involved must know exactly what legal options they have moving forward.