RULE #39: In business you will always require a certain amount of guidance from people you know with more experience. When you run into a situation that requires someone else that has a certain expertise, it’s great when your new business partner gladly offers up his contacts and claims they’d be glad to help with any of your questions.
Always heed the signs and signals you receive from past associates of your new business partner.
Bad sign #1: When you call your business partner’s past business contact and identify yourself as being in business with him and they say they can’t help you, but ‘Good Luck’, then it’s probably time to find a new business partner.
Having someone that has had previous dealings with your new business partner basically blow you off is a very bad sign. It’s especially pathetic when your partner has no idea that his business colleagues think he’s a big joke and are surprised that anyone would want to be in business with him. Unfortunately, these are things you may not find out until after you’ve entered into your new venture.
Bad sign #2: When you send some of your best business associates to meet with your partner and they walk away saying, “I don’t trust that guy. He’s got a bad side and you better be careful.” Always listen to these observations because they are a prediction of what’s to come in terms of your relationship with this business partner. He may put on his good face for you because he’s counting on you to help him make money and only show his true self to people he doesn’t have any investment in.
Bad sign #3: When Business Partner hands you the phone and asks you to talk to his financial adviser and best friend in the world and this guy asks you, “What do you plan to do when Business Partner gets a case of the Big Head and takes a job for a million dollars and decides he can do the business without you? Will you sue him for half the money?” Even if the alleged financial adviser is nothing more than a surfing buddy, listen to what he’s telling you. He knows the guy a lot better than you might.
Now this is something you’d never think would happen, but it does happen all the time. If you end up being in the dark about your new business partner until after you’ve legally tied yourself to his, do not despair. There is always your Exit Strategy. Have an Exit Strategy in mind before you ever sign legal papers. Your new business partner does not have to be made privy to your exit plan, in fact, it’s a good idea that you keep this to yourself.
So, what’s your Exit Strategy?