All businesses have internal conflict at some point. Sometimes it can be a positive factor. Other times it can be destructive.
The possibilities for disputes between business owners are many, including:
- Operational issues
- How to deal with financial pressures or bank requirements, including personal guaranties
- Buy-sell arrangements
- Profit sharing
- Control and deadlock
- Death, divorce, disability
- Who does what, or why isn’t your partner doing what he is supposed to do, or why are you doing too much?
- One partner wants out. Or both partners want out and they can’t agree on a price or procedure.
- Personality conflicts
- Conflicts over credit for work done
- Concerns over bookkeeping and personal enrichment
- Self-dealing, inadequate care for business responsibilities and other fiduciary duty concerns
Legal remedies are expensive and time consuming and ultimately limited. They can sometimes even bludgeon the business to death in the name of conflict resolution. For instance, a court-ordered receivership and judicial sale can cost hundreds of thousands of dollars and do enormous reputational damage to partners and the business.
There is another way. Mediation can help partners head off problems before they become explosive. It can also help defuse the explosives in a way that helps people reach resolution.
At the first meeting, the mediator will discuss with the partners whether their situation calls for a single session or a series of sessions. While the mediator is not a therapist, he can serve a useful role in helping to identify and resolve issues as well as controlling tensions while the business moves forward.