Business Partners Who Don’t Agree on Business Issues: What Next?

Creating a business with a business partner can be an exciting time in your life. Both individuals are focused on making the business grow, finding creative solutions to challenges, and creating financial security for the future. Unfortunately, it's often difficult to remember that it may not always be this way. If one business partner decides he/she wants out of the business, or if the business is not growing as expected, problems can surface. Without a concrete written and signed agreement between the parties, distribution of company assets, dissolving the business, or transferring ownership gets sticky. Joe and Rich found this out the hard way.* The two men started out on a mission to establish themselves in a local restaurant and catering business. Joe's business and financial skills combined with Rich's culinary training and experience seemed to be the perfect fit. At first, things were great and the business seemed to be on solid footing. Over time, the grueling hours of working as the head chef in a restaurant began to take its toll on Rich. He resented the long night and weekend hours required to make it work and found that he was neglecting his wife and two children more than he had expected. When he approached Joe about his concerns, the discussion took an unexpected turn. Joe explained that they could not financially afford to bring on additional staff and that Rich would have to continue with his responsibilities for the foreseeable future. Rich was taken aback and had no idea money was so tight. He resented the fact that Joe had not keep him apprised of the situation. He had no idea that Joe harbored resentment that Rich was unable to produce a greater return on their business by being more frugal with spending. That was the beginning of a tumultuous relationship and before they knew it, the two business partner were frequently embroiled in angry debates. Rich was ready to get out of the business, but it wouldn't be that easy. They had not created an agreement about how this would be handled and now they faced some big challenges. Even accessing legal counsel made it difficult for each of them. That's when Rich's wife discovered that Virginia is a state where mediation services is not only gaining popularity, but replacing costly litigation in personal and business relationships. After spending several sessions with Liza Hill of Mosaic Mediation, both Joe and Rich were able to evaluate what was important to each of them and understand each others viewpoints more fully.  Instead of being angry because of incorrect assumptions of motives, they began to talk about possible solutions that met both of their needs. They even found a way to resolve their situation that left them feeling good about the outcome and actually having a conversation about the future without arguing and blaming. Mediation was a much quicker and less financially burdensome process than litigation would have been. It allowed both men to work together towards a solution rather than having a "verdict" imposed on them. Business partners typically start out with the same goals and vision -- but when things change and the relationship starts to go south, you may be wise to consider mediation over litigation. Like Rich and Joe, it can be the smartest thing you decide. *Names have been changed for privacy and confidentiality.