Some of the more common reasons why businesses bring a new partner into the fold include benefitting from an infusion of funds and taking advantage of the partner’s various skills, experiences and business networks. As wonderful as having a new partner can be, the reality is that not all business relationships are beneficial. You understandably want to make an informed decision that is based on sound facts in order to protect and even to grow your business. These are some of the steps that you can take to properly vet a new business partner.
Conduct Online Research
There are various ways to research a potential business partner online. For example, you can read the person’s social media pages, and you can conduct a broad online search to find news stories, photos and more. You can also use a website like Crunchbase.com to obtain more detailed information about a potential partner, or even just companies they are listed with. For example, if you wanted to know more about someone who worked with Xyngular, you can take easily find out more about the company and its people just by looking them up.
Remember, also, that it is just as important that your own business details are transparent to the potential partner. After all, this person should want to ensure that you and your business are aboveboard and ethical as well. If there are any areas of concern that you are aware of, be upfront about them and provide an explanation so they don’t find it on their own and let it ruin their confidence in you. If you find unpleasant or undesirable information, it may be beneficial to ask the person for an explanation rather than to make rash decisions.
Your potential partner’s financial health can speak volumes about him or her. Through a financial review, you can determine if the individual can properly manage finances and if he or she may be stressed by a tight money issue. You may even learn about unethical accounting principles or a possible legal issue. If you are not comfortable reviewing financials with a fine-tooth comb yourself, ask your accounting team to do the work for you. This critical step can be time-consuming, but it is vital to your decision-making process.
Analyze Credit Reports
It is also smart to analyze the individual’s personal and business credit reports before finalizing your decision to extend a full partnership to the person. A credit report may provide you with the person’s financial management history for the last seven years or longer. While current financial statements may speak about recent money management efforts, a credit report shows a more detailed and lengthier history. Remember that a review of both a business and a personal credit report are in order. This may seem like a serious measure to take, but if they are dedicated to helping your business, they will likely understand why you need that information.
After all of the data and statistics have met your requirements, it’s time to set that all aside and focus on the person themselves. You may have had meetings before that focused on the numbers and what you’re looking for, but that may not tell you what you need to know. Schedule some time for you and your partner to converse and interact outside of the business environment. Whether you take them to lunch, get a cup of coffee or hit the driving range, it will give you time to get to know them better. If your personalities fit well with one another, you are much more likely to succeed.
Finding the right individuals to partner with is rarely easy to do. You may be inclined to ask a friend or a close family member to partner with you, but regardless of who you are considering, you should spend ample time vetting each one in these important ways. Each of these steps offers potentially new insight into your potential partner in success, so do not gloss over any step.