Entering into a business relationship with someone is always an exciting time with new opportunities and a learning process to go through.
Make sure you get that new relationship underway by following a few simple steps:
- Your gut feel – do you like them, are you comfortable telling others about the relationship, is something just not stacking up…. These are hugely important factors – don’t leave any unaddressed.
- Basic due diligence – The basic stages of due diligence in what you are going to do together.
- Extended due diligence – The detailed steps of understanding who you are going to be doing it with!! Is honesty, integrity, track record all ‘as advertised’. Criminal record transparency – if you don’t find out now, the banks will find out when you try to borrow as directors. Be open and most things can be discussed through.
- Values – do your future partner(s) share the same value ecosystem or at least are the values on a similar moral compass bearing to your.
- Listen – do they listen to your views? So much trust or lack thereof, emanates from lack of respect through not listening
- Footprint – Remember that whatever you do, however you say it and what you produce generally leaves an audit trail that can’t be extinguished. This goes for Companies House, social media, the web in general etc. Make sure each step passes muster very carefully – it will be time well spent.
- Openness – “An open hand has the tightest grip”. Are you and your potential partner naturally being open and transparent with each other. Is there a feeling of ‘should I show them this?’ or ‘why am I not being showed this?’. If so larger issues may be at play.
Warren Buffett has a great phrase “It is only when the tide goes out that you realise who has been swimming naked”. Don’t wait for something to go off the rails to act or to realise what you could have known at the start with a little extra thought. Marketing can smooth over many cracks – make sure you understand this and go into new ventures with your eyes wide open.
As a corporate trouble shooter for several decades, I know how difficult it can be for some people to ask the tough questions in the good times, however I can assure you that is much much easier than having to unravel a disjointed or failed joint venture.
Be safe in entering JV’s by using these simple steps and start your relationship on solid bed rock – ignore them at your peril.