How to Check the Company You Are About to Partner With

As a businessperson, the chances are high that you or your business will have to enter into a business partnership at some point in your career. If you have weighed your options and consider a partnership to be the next big move, next, you must consider essential factors before signing any legally binding agreements. It’s an exciting move, but it is necessary to evaluate your potential business partner and determine whether the merger would translate to profit, or whether the other party intends to take advantage of you. Here are the essential ways to evaluate the company with which you are about to partner.

1. Analyze the other company’s financial records

Most business people prioritize the operational costs and the charges to incur when starting the merger. They forget to consider some critical financial aspects such as the other party’s total assets, their debt record, or whether they are bankrupt. The provisions of the business partnership will determine whether your assets will be used to recover a debt. Inquire about your potential partner’s financial records and, if necessary, do a search on your partner and retrieve their federal bankruptcy data. The search will enable you to query the business name. You will get details such as the debtor’s name, their address, liability amount, the client’s assets, and other valuable financial information. If you are wealthier than your partner, then the chances are high that the other party will take advantage of you, and business advisors would advise you against such a move.

2. Evaluate your partners’ personality attributes

Business goes beyond profit margins. Try and find out your potential partner’s attributes, determine whether they can be held accountable for their mistakes, whether they can dedicate their resources to make the business successful, their position on taking debt, and how they handle money. If there are chances that your potential partner enjoys gambling, this is an indicator of a brewing storm. Your potential partner’s attributes will determine how long the merger lasts and the possibility of business success.  

3. Determine whether the merger will require you to change the company structure 

Some partnerships will require that you change some of your company’s doctrine provisions; therefore, try and inquire whether your potential partner is okay with the way things stand or whether you will have to make amendments. It would be best to settle for a partner whose ideologies fit into your company doctrines. It would be best if you considered a partner who won’t require massive alterations done to your company policy. Such a move will shield you in case the merger fails. 

4. Introduce your partner to your employees and customers

It will help if you evaluate how your potential partner interacts with your current employees. In the process, analyze how they make decisions and whether they have team-building skills. By monitoring your partner’s behavior, you can determine whether they can improve the company operating standards and whether they can motivate workers to achieve more for the company.  

Also, introduce them to some of your clients and monitor how they handle clients and whether they can deal with challenging situations or resolve conflicts with clients. The right partner knows how to nurture relationships, and they will remain calm when handling a misunderstanding with clients. Through this analysis, you will determine your potential partner’s strength and whether they can nurture customer relationships. 

5. Find out whether they have a track record 

An ideal business partner has a proven track record; therefore, try and determine whether your potential partner has experience and knowledge in a particular field. By entering into a merger, both parties must bring in unique expertise. The best partnerships constitute partners who have a different set of skills that complement each other. You should beware of partners who boast about accomplishments, yet they don’t have records to back up their claims. Review your partner’s financial records and research on their prior business success or failure. Also, seek help from your attorney, who will do a credit check on your potential partner and determine their previous litigation cases.

Business partnerships can be beneficial to your company to provide that you identify the right partner. The screening process can be complicated, but with the above steps, you will determine whether the potential partner is the right person to partner up with. You should be aware of business partners with a hidden agenda and perform all relevant background checks before settling for one. Successful partnerships are based on trust; therefore, ensure that both of you share the same values and principles before you sign any agreement papers.