I started my working life in the car business. I quickly came to the conclusion that people spend more time researching the purchase of a television than a car. In other words, people buy cars on emotion and looks.
When engaging with business partners do not connect based on first impressions. In my last company after a failed situation, we were fond of asking each other the definition of “assume” (ass-u-me). We assumed many facts that had we checked first, we would have gone a different direction.
Here are a few ideas for how to check out various business partners before hooking up:
- If you are thinking about merging with another business, try co-locating before actually combining the companies, especially now when space is easy to come by. There is nothing like pulling an 18 hour day with someone to determine your compatibility. It is much easier to unwind a shared location than a legal entity
- When choosing a VC or investor, check their references, both successful and not. Mark Suster wrote a blog on this subject recently that gives several great tips. It is definitely worth a read.
- When looking for a service provider (lawyer, accountant etc) ask them for references for similar businesses. Make sure they understand your business as you do not want to pay their hourly rate to teach them.
- When checking references, ask each reference for an additional reference, preferably one that no longer does business with the person your checking on.
Take your time and do this right. You do not want to end up “married” to someone you just can’t work with.