Launching a new business with a friend, family member, or another trusted partner, transforming your shared vision into reality, is exhilarating. It can be scary, too, of course. But mostly – and especially in those early days – it’s exciting.
So exciting, in fact, that it’s sometimes easy to ignore the boring stuff (like figuring out how you want to operate your business long term and putting that in writing), or to gloss over disagreements, or to forget that even friends or trusted business partners will sometimes have honest, good-faith disagreements.
We usually think of mediation as a way to react to conflict. And it certainly is a tool for empowering parties who find themselves in conflict to work through it on their terms. But mediation can also be a way to prevent (or at least minimize) future disagreements, or to help people preserve relationships before potential disputes turn into actual battles. We offer here a few ways mediation can help businesses keep running smoothly.
Shared Expectations From The Beginning
It’s easy for business partners – in the thrill of leasing new space, designing products, planning a website, and opening their doors – to just assume they’re all on the same page. That they all see the business the same way, all agree on who will do what when, all have the same plan for how and when they’ll get paid. Hints of disagreement or just different understandings get glossed over or ignored; after all, nobody wants to have a hard conversation – maybe even an argument – in all that excitement. It’s common to just hope it will all work itself out.
But the time to work it out is right away. For new business partners, the time to spell out their expectations and to figure out how to deal with it if (when) those expectations differ, is at the beginning – while you all are still excited, still like each other, and before any of you get too set in your thinking. Talking about who will have which responsibilities, who will be in charge of what, how the money will be spent, and especially how the money will be shared is hard for many people. Not talking about it is easy until it isn’t. Then it’s a fight.
Negotiating a written operating agreement helps owners set their mutual expectations. A mediator can guide the owners through those difficult conversations.
Employee (and Employer) Management
An employee is an investment of time and money for a small business – and a good employee is worth every minute and dollar. But even good employees sometimes struggle to meet your expectations. And good employees also sometimes find themselves frustrated with employers who might not be great at setting and explaining expectations.
Rather than lose that employee, or maybe (in a worst-case scenario) find themselves facing an employment lawsuit, businesses can bring in a mediator to help the employee and employer talk through their concerns and work together to best serve the needs of the business and its clients.
Contract Negotiation
It probably doesn’t make sense to bring in a mediator for every transaction, but some contract negotiations – especially for big deals that are important to both sides – can move past tense into confrontational. That can undermine trust, which could tank the deal altogether or taint the parties’ ongoing relationship after they (perhaps grudgingly) sign the contract.
Before those deals sour that much, a mediator can help both sides they started those negotiations for a reason: They have a shared interest, they both have something to gain, and if they can focus on those shared (or at least overlapping) interests, they can probably find a way to work out the sticking points in the contract language. Then they walk away with a deal both sides like and the basis for a long-term business relationship.
Parting Ways
At some point, there’s a pretty good chance one of the owners will step away from the business. That can be a tense time. It’s easier if (as suggested above) the owners started their venture by negotiating an operating agreement that spells out how a departure will be handled, but even with an operating agreement, there may be some points of friction. Rather than letting that friction build into a flame that burns bridges, a mediator can help parties build on their years of shared experience to negotiate a graceful exit.
Every time you work with them, mediators help you think about how to communicate through conflict. By thinking creatively about how mediation might help you manage disagreements, you can set the right tone for your business throughout its life.
Reach out to Rubric Legal LLC today at (612) 465-0074 to learn more about the mediation process in St. Paul and Minneapolis.