When you agree to work with a business partner, you place a good deal of trust in this individual, and your business’s success and profitability may be at stake. Partnerships may start out strong and then turn sour, though, and this may happen for any number of reasons. Partnership disputes may prove costly, time-consuming and embarrassing, but there are some steps you may want to take to reduce your odds of involvement in one.
Per Business News Daily, monetary, operational and intellectual property disputes are all common among business partners. To lower the chances of you having to spend time and money fighting your business partner, consider taking the following actions.
Perform background checks on all potential partners
Anyone getting this much of your trust needs to be a person of good standing and strong moral character. Conducting a background check to find out if a potential partner has any skeletons in his or her closet, such as judgments, lawsuits or serious criminal convictions, may serve you well in the long run.
Review the books of a potential partner
If you are considering entering into a partnership with a company already in operation, ask to view its financial and accounting records. Most entities consider this a reasonable request and should comply with little, if any, issue.
Determine dispute resolution tactics
You may also want to discuss what dispute resolution methods you plan to use in the event of a partnership dispute before one arises. You may, for example, agree to try to mediate disagreements before entering into litigation.