Spot the traits of a bad business partner before you invest your time and money.
I’ve been a lawyer for a long time, and I’ve handled a lot of cases where business partnerships break up. After a while, you start to see trends. Of all the breakups I’ve handled both in and out of court, they all have at least one of these five traits in common.
1. They’re only available when they want something from you.
Somebody starts talking up a big business opportunity. They’re willing to let you in on the ground floor. It’s great opportunity and means easy fun money. Maybe they have a concept, maybe they have a location, but whatever they do have there’s something they need and that’s what you have. All you have to do is come along for the program, and provide what is needed.
You take care of business. You provide all the assistance you can. You keep your word. You’re totally committed to the new program, and maybe you’re even having some fun. Then something comes up and you need something from your partner. You leave multiple calls, emails, text messages. You may hear from your partner, but it’s because he or she wants something else from you. They never seem to have the time to get back to you on the matters that matter to you. This is a bad sign. Beware.
2. They don’t need it in writing.
Okay, you’re hooked. You like to deal. You mention to your potential partner that it might be a good idea to get the agreement in writing. Suddenly, your partner has had all the experience. He explains to you how expensive lawyers are. He tells you how a deal like this doesn’t reduced to writing easily. He says, “We will get to that but let’s get started right away.” These are all bad signs. If someone is willing to tell you something and make assurances, they should be willing to put them in writing. If you’re talking with someone about a business arrangement, and they resist putting it in writing, run.
3. They are full of surprises.
You’re working on the project and everything is going well. You come to find out that your partner has signed a deal with someone else and has included you. This is a surprise to you. When you seek to talk to your partner about it, they’re not available (see number one above).
You’re working with your partner and find out that someone made a payment – great! How come you didn’t hear about it? Where did the money go? Your partner made some decisions without talking to you first and this is not what the deal was supposed to be.
There’s been a big problem with the business. It happened some time ago and you did not hear about it when it happened. Maybe you even found out about it from a third-party. Once you look into it you see that there was a big problem and that you had no idea.
The last thing you need in a new business is surprises, especially from your partner: Move on.
4. They insist that they control the money.
The two of you are working along and you’ve come to an agreement. Now he needs a check from you. You agree to write a check but you’re wondering where does it go? When you ask about accounting, he assures you he’ll take care of it. When you ask about the banking he assures you he’ll take care of it.
You’ll get taken care of, all right – take care of yourself and get out.
5. The prospective partner tells you about his big business deals but will not give you names and numbers.
So you’re looking at the opportunity and you’re looking at your potential partner. He’s full of assurances. He’s been here before. He’s done a lot of these deals. He’s made lots of money. When you ask for details, you may get a lot of details but not a lot of information. So you ask, “Who did you work with, and how can I get a hold of them?” … Silence, or doubletalk.
If you don’t get names and numbers and ways to check on references, don’t move forward.
Keep your eyes open for these five traits and save yourself a lot of heartache and a lot of money.
What’s your experience with business partners? Share your story in the comments below!
Brian Vincent has over 30 years of experience as a business law attorney and has worked extensively with business owners to protect and defend their interests. Contact Brian online or at (616) 608-4440 with your questions.