The Costs of Disputes

Posted on Dec 3, 2015

You are the owner of a small-to-medium sized business. You and a few trusted partners with the right complementary skill sets have come together to fund an exciting new business. You cobble a business plan, patch together funds and commence an exhilarating run in the market. Few joint ventures are immune to paralyzing disputes between partners. The bottom line—and this is a true bottom-line issue—is that disputes cost money, and depending on the kind of business you operate, it’s sometimes really big money.

The Do-Nothing Plan: An Expensive Proposition

If your disputes hinder operations, think about how much money can be lost on inefficient or idle operations for a day, even an hour? Tens of thousands? Millions? Your firm’s losses may not be as large in comparison, but when operations are hindered, your business could be put in jeopardy, if even for the short run. When you are able to work out how much lost profits could strike, you will understand the risks of downtime in a realistic context. And let’s face it; nothing speaks louder than a threat to the bottom line. Alternatively, disputes will distract you from thinking about how to improve your sales, synergise with existing market conditions, motivating your staff and identifying and exploiting favourable market trends. Time lost from these could lead to your business stagnating, facing strategy execution risks and even loss in market advantage. Worse, if a dispute escalates to the partnership coming to pass, you will need to walk down the path of painful termination. For example, if your retail business has not yet brought from concept to profitable operations, parting ways will set you back not only in dollars but in time. If a novel idea has not been brought into development stage, you may run the risk of lengthy intellectual property litigation.

What’s your edge?

We will help you crystallise your thoughts and provide for the future scenarios. By putting together a well thought-out joint venture document, you carefully set out the contributions of each partner, the obligations, rights and rules you will live with for the journey. You will consider the time frame of your shared expedition and you will shake hands on how you will part ways in the future, whether you have made good your time together or see fit to go separate paths. You are laying the groundwork for a continued relationship after this particular venture.

Flint & Battery Suggests: Make Business Sense with a Trusted Partner

Teaming up with a trusted partner is a smart way to understand how to protect your relationship assets, business rights, implementation risks and to assist you in researching the exit scenarios and how to address them before downtime takes its toll on your wallet.

•    Look for a firm with proven experience who can understand the importance of the role of a shareholders’ agreement in the context of your business.

•    Work with your partner to evaluate the business risks and relationship assets surrounding your partnership.

•    Make sure its experts can offer you functional solutions to address risk factors of your business.

•    Consider backup strategies where appropriate.

Do you have questions? Contact Flint & Battery. You’ll have your concerns addressed and solutions presented to face your specific challenges.