A frequent source of failure for many fledgling businesses isn’t a lack of capital. Getting proper funding to get your idea off the ground is, of course, required to start a small business in the first place. But after the machine is moving, internal and external business disputes are among the most common causes for small businesses to fail.
Conflict in the business place is inherent; it isn’t going anywhere. According to data collected by Business Know How, poor management is the number one cited reason why small businesses fail. Poor management does not just manifest as inexperience; rather, it is often undergirded by professional conflicts.
Types of Business Disputes
Business disputes can occur outside or inside the business. For example, business owners may struggle with government agencies and supply chain members. However, internal disputes are more likely to shake your business’s foundation. Both of these kinds of disputes can cause your venture to crumble just as you’re trying to build it up.
Employment Disputes
Stemming from wages or layoffs, or even involve claims of discrimination, harassment, and wrongful termination, employment disputes can be a huge strain on a business. Mishandled employee-employee disputes can be disruptive to business and lead to the degradation of company morale. When consistent and poorly resolved, employee disputes can cause a business to fail.
Partnership Disputes
Starting a small business with someone is a huge undertaking. It requires each party involved to be on the same page about what the company does, how it does it, and where it’s going. This isn’t always the case. Even from the jump, miscommunication or misalignment of vision can spark internal turmoil between business partners. And, particularly as the business grows, and visions evolve, partnership disputes may escalate. This can cause a business to tailspin; directionless and seemingly unmanned as the pilots bicker in their cockpit.
It can be challenging for a business to execute its basic day-to-day functions when its leaders have fraught relations. And it’s even more challenging to secure investors, manage employees, and stay profitable.
You can protect yourself and your business from failure with a legal expert by your side to help mediate the complexities of intrapersonal relationships in the workplace. If you are in need of legal advice, schedule a consultation with Richards Rodriguez & Skeith today.