How to Identify Bad Business Partners
December 16, 2014
How to Identify Bad Business Partners
Our four-part series, “How Business Partnerships Fail and How You Can Succeed” continues with this week’s article. We discuss “How to Identify Bad Business Partners“. Last week, we opened this series by talking about the different reasons that business partnerships fail. Now that you’ve decided to consider bringing on a partner, it’s time to discuss how to identify whether you’re joining-up with a good partner or a bad one.
When it comes to business partnerships, there are certain types of people and personalities that you want to look out for. These people need to be the type that will be an asset and a partner rather than a thorn in your side. There are two types of people in business partnerships. Those that are there to make the business succeed and those that are there to make themselves succeed. I’ve had several experiences in business partnering and I wish that I knew then what I know now. I was forced to learn the hard way. I want you to avoid that lesson!
Below, I’m going to list several tell-tale signs that you should avoid:
The Negative:
1. A potential business partner that demands a substantial salary:
When small businesses are birthed, there typically is not sufficient capital to pay the partners a substantial salary. One of the more popular reasons for business partnering is the desire to grow the business. Additionally increasing the bottom line in order to have the ability to pay employees higher salaries. Yet, this potential partner demands a high salary while the other partner doesn’t get one. This obviously makes zero sense. We all have living expenses, but when you’re in the beginning stages of a new business, everyone is going to need to make sacrifices. So if you have a potential partner who’s intentions of greed become clear from the start, avoid them at all costs!
2. A potential business partner who refuses to invest any of their personal money into the company, yet they expect you to put up all of your own money:
I had one who wanted a large portion of the company and profits, yet he was never willing to put one dime of his own money up to grow the company. The problem was that he wanted half the cake without including his own ingredients. These type of people are literally like leaches. They suck-out all of the positive and leave you only with the leftovers.
3. A potential business partner that wishes to hire their spouse, family or close friends right out of the gate:
Look, I under stand that in small companies, it’s normal to hire employee’s spouses, family or friends. You typically trust these people and they can make good employees. When a potential business partner requests this right out of the gate, it can end up biting you in the backside. This request from the beginning usually means that they are more concerned with enriching and employing their family and friends rather than growing the company.
4. A potential business partner who has to be the big-dog. The peacock that constantly preens:
He always has to have the last word or spends company time bloviating about his supposed accomplishments. I once had a partner that would take the stage at our events and within five minutes. We had attendees leaving during his session because of his arrogance and just the way he carried himself. Clients were there to learn, not to get a lesson on how awesome this man thought he was! These type of people are interested in nothing but money and stroking their narcissistic egos.
5. A potential business partner who is emotionally unstable:
It has always amazed me that in the last decade in the industry, I have met scores of emotionally unstable people. Especially men. One former partner in particular was constantly arguing with me over the silliest issues. He would also quit at least once per week! I recall one situation in which he made a scene in front of about 50 attendees because he didn’t agree with an offer I relayed to the crowd. He stormed out of the event, mumbling loudly about how “this is it and I quit” while slamming the door to the conference room.
How unprofessional! The funny part is that in the overall scope of things, it was not a big deal at all! I even had some attendees approach my staff and me complaining about his unprofessionalism. Some of them even wondered if he actually owned the entire company because of his pompous and arrogant presentation! He made it sound as if he had built the entire company on his own. Since he had no personal monies invested in the company, there is no reason that he should’ve been upset that I was including another freebie with an already existing offer to potential customers. I literally felt like I had partnered with a 6 year-old little boy. I felt more like a father than a partner.
Please take note of this article and apply it to your business. You’ll thank me later! Next week, we’ll discuss How to Identify Good Business Partners! See you then!
