Don't let bad judgment make business disputes worse

"It's not personal, it's business." This is a common phrase people hear or say when business owners must make difficult decisions that will likely make some people unhappy. However, when it comes to small or medium-sized businesses, it can be all but impossible to separate the personal element from the business element.

Considering how intertwined business and personal matters can be, it is important to keep potentially bad judgment in check if you run a business with a friend or relative.

Making it personal

One of the easiest mistakes to make in these situations is to let personal emotions drive rash business decisions.

For example, consider a recent case involving two women who started a consignment boutique together. The co-owners had in place an arrangement where one took on the financial responsibilities of the business and the other managed day-to-day operations, but the women clashed over various alleged bad decisions and missteps when it came to running the business.

The situation reached a head when one of them entered the store after closing and removed all the contents. She also changed the locks. Because of her actions, the store had to close immediately. A judge ordered her to return the contents, but the situation is evidently far from resolved.

Understanding the impact

Instead of resolving the business dispute in a professional manner, the woman in this case made a rash decision that may have felt emotionally satisfying at the time. However, these types of actions have serious consequences.

This likely took -- and will continue to take -- a great financial toll on the business and the owners. Further, customers and consignors who previously worked with the store or shopped there may choose against doing so in the future because of this tumultuous situation.

In other words, choosing to approach business disputes from an emotional perspective rather than a professional one can have an undesirable impact on more than just co-owners. Doing so can also adversely affect employees, partners and customers. 

Therefore, choosing to resolve business disputes through traditional avenues like mediation or arbitration can be crucial. Not only can they allow business owners to reach satisfactory outcomes more amicably, but they can mitigate the fallout that a dispute takes on other parties.

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