10 Ways Small Businesses Can Manage Conflict

If you run a small business, you know too well how much time, effort and worst of all, money is ploughed into resolving conflict. It could just take the form of an unhappy customer complaining to you about a service or goods you have provided. Large companies have whole departments dedicated to customer service or legal departments that deal with disputes but you might not have that luxury (yet!) .

Small business owners usually deal with conflict by themselves which can be stressful and tiring. If you own your own business, you have to sharpen your communication and your conflict resolution skills to avoid wasting resources that are better spent on making your business flourish. The reality is however, that conflict is a normal part of your growth. The more successful you become, the more likely you will come across it. This blog post is about managing conflict better and here are 10 ways to do it:

  1. Conflict considerations are key. Is it worth it? Take a cost/benefit analysis of a conflict situation. In business, spending thousands of pounds on legal fees could ultimately bankrupt you. Think about whether a commercial settlement is a more attractive alternative, no matter what you feel about the dispute.
  2. Communicate constructively. I often advise clients to make sure their terms and conditions are clear and that any agreements are written down, especially if you have discussed this by whatsapp or in a meeting. Confirm what you have said to each other in a follow-up email. This can be uncomfortable because it may be time-consuming and seem confrontational, especially when you have just entered into a commercial relationship but turn it to your advantage. Emphasise that clarity, transparency and honesty are important to you because they prevent disagreements in the future.
  3. Understand the needs and interests of your business partners and customers. This will help you to respond to them with creative solutions without having to get a lawyer involved.
  4. Don’t just throw money at the problem. In some cases, that really is the only solution, especially if your cost/ benefit analysis of the conflict indicates that a settlement will avoid legal costs from escalating. However, knowing the needs and interests of your clientele and partners will help you to create alternative solutions which could lead to more fruitful relationships.
  5. Empathise. I was recently involved in a distressing dispute which caused a lot of stress and anxiety to the business owner involved. When he complained about his accountant’s negligent behaviour, the response he received was to check the terms and conditions. This may have a legal foundation, but it was lacking in empathy and emotional intelligence which pushed the business owner to seek redress from the courts. This could have easily been avoided had the accountant apologised and sought to work with the business owner to find a solution. A lot of the time, it’s the failure to acknowledge the emotional distress caused by a conflict that motivates claimants to the courts.
  6. Think about your conflict strategy. It will be different in every conflict and as it develops. In some situations, it might be best to accommodate a long-term client who brings you a lot of business. In other scenarios, avoiding a conflict might be effective in cases where the customer is just feeling frustrated and directing it at you for no tangible reason (try empathising instead).
  7. Learn how to handle complaints. Any successful, client-facing business has a customer services department and there’s a good reason why.
  8. Ask for clarification. If you are not sure what your client wants, ask them for clarification. When you have it, ask them to confirm your understanding in an email. It sounds simple but many conflicts result from a lack of understanding and communication. If you are worried how this will be perceived (i.e. I will look stupid) say why you are asking: because you want to make sure you do a good job! I love it when people I contract with ask me for clarification because it shows that they care about my needs.
  9. Keep your reputation in mind. The way you handle conflict says a lot about you and your business. I refuse to engage with businesses that handle complaints badly because it shows a lack of interest in me as a human being and it demonstrates that their sole interest is to take my money.
  10. Try mediation. Lawyers’ fees and court costs can quickly escalate beyond control. Mediation can resolve a conflict in a day (if all are motivated to find a resolution) and the best mediator will save you a fortune in costs. They’ll even help you to come up with solutions that save your relationships and help you to grow your business, turning a stressful situation into a strength.

What are your thoughts? Leave a comment!

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