How to recognize a bad business partnership right from the start

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

To avoid failure, analyze the potential companion's behavior and don't discount your intuition.

Potential partner is hiding information from you

Let's say you decided to join a project that your likely partner initiated. This is a certain risk for you. If it doesn't work out, you could lose time, money, and business reputation. Therefore, it is extremely important to understand at the stage of negotiations what you will be working with.

If the interlocutor is floridly answering questions or avoiding them, not ready to provide financial or other important information, this is definitely a red flag. Perhaps he is trying to present the project in the best possible light, or he is planning to deceive you. Both options are not suitable for you, because without exhaustive data, this is not an adult deal, but a purchase of a pig in a poke.

If a partner is silent about some business information about himself, this is also a reason to be wary. Perhaps such secrecy will not directly affect the business, but it will undermine trust. You will doubt, spend time and effort to double-check the data, to control what is happening in the partner's area of responsibility. All this is a waste of resources.

The key to success is honesty and frankness from the very beginning.

A partner brings problems, but not solutions

The goal of the partnership is to consolidate the experience, knowledge, resources of its participants and achieve a more impressive result than if they acted alone. That is, the presence of a second person should simplify the processes, not complicate them. But there are people who see problems in everything and generously hang them on others.

By itself, finding weak spots where you can spread the straws ahead of time is a good strategy that avoids a lot of trouble. But only if the partner offers solutions at the same time. Otherwise, the situation looks little like a partnership, but more like a strange game, where one acts as an auditor, and the other spends his resources on satisfying his requests.

In addition, a moderately optimistic attitude helps in work, when they do not close their eyes to problems, but believe in the best. If someone is constantly itching over the ear, how bad everything is, motivation and performance will suffer. And in business, you cannot afford that luxury.

The partner's contribution to the common cause is incomparable with your

You don't have to be able to do the same thing. It is very good if your knowledge and skills with your partner do not overlap, but complement each other. For example, let's say you're working on a startup. One of you is a cool techie who creates amazing toppings. And the second - charming and creative - packs and presents the product. It is important that everyone is busy and trying for the common good. If someone tries to get away from work, you can't call it partnership - rather, parasitism.

It turns out that one works, but both earn. It is simply not profitable for you.

Of course, if you are doing completely different things, assessing the equity of contribution is not easy. But there are beacons that are easy to spot. For example, when one is sitting in the office and the other is on the beach in Goa, there is definitely a reason for doubt.

You are not on the same wavelength

You don't need to think alike, but at least the core values, perspectives, and financial aspects of a business are best viewed in the same way. Otherwise, you will face inevitable disagreements, quarrels and - in the worst case - a division of the company.

The partner refuses to document the relationship

It seems that you have agreed on all aspects of business development, have not kept anything from each other and are ready to come to an agreement. But when it comes to formalizing all the conditions on paper, a potential partner has a lot of excuses - even the banal one: "Don't you trust me?"

The situation here is about the same as with the prenuptial agreement. At first, people do not want to stain love with thoughts of separation, and then they sue over property. Only in business it's not about love initially. And it is better not only to stipulate all the points, but also to fix them on paper. Including fixing how you will divide the business. If the partner deliberately refuses to do this, there are reasons not to get involved in such cooperation.

Partner has no questions

When the person you plan to team up with rains a million questions and doubts at you, that's okay. He tries to see if there are threats and hidden problems that will lead to the collapse of the project after he invests his resources in it. You probably behave the same way.

If the potential partner has little interest in the project - he does not want to see the business plan and financial documents, know the history of development, study the risks and delve into the target indicators, this is suspicious. Maybe he's up to something, or maybe he's not a very good businessman. Both options will not suit you.

Do you feel the catch

It happens that from a rational point of view, everything goes right and according to plan. But something inside you screams that you don't need to agree to cooperation. It might be worth listening. Intuition has nothing to do with foresight and any kind of fortune-telling.

It is possible that you subconsciously noticed alarming details, but did not reflect them. And doubt settled down.

If you are very interested in a partnership, you should not end the relationship because of just a premonition. But this is a reason to think, weigh the pros and cons and go through the list above again.