Are you thinking about starting a partnership or joint venture? If so, you’ve probably spent countless hours refining your business ideas, researching the market and coming up with a business plan. But have you spent any time vetting your potential business partner(s)? If not, then you still have more work to do.
All too often, we assist attorneys and clients in quantifying the damages an unethical partner has inflicted on a business—and there were often red flags in an unethical partner’s background. Vetting your potential business partner is probably one of the most important activities you can do before embarking on your new venture.
Consider vetting your potential business partner(s) by conducting a thorough background check, searching social media and interviewing their prior and current business partners and employees. You should pay special attention to red flags that might indicate financial and ethical problems.
- Financial problems, such as bankruptcy filings, tax liens and poor credit history, might be indicators the individual mismanaged his or her personal and/or business finances and may lack the skills necessary to manage a successful business. Worst case scenario: The individual tries to solve his or her financial woes by stealing from your business.
- Ethical problems—poor reputation, bad press and/or litigated claims in which they or their business(es) is named as a defendant—may signal an individual who lacks integrity and isn’t trustworthy.
Protect your business, your time and your money by appropriately vetting potential business partners.
For more information on this or other topics, please contact us.